by Andrew Johnson
April 6, 2012
The Rothschild banking dynasty
is merging its French and UK arms
to keep the family's grip on the
in the face of new financial rules.
Rothschild's main holding company,
Paris Orleans, will issue new shares and
swap them for minority stakes in its French and British subsidiaries.
The resulting elimination of separate minority shareholders in businesses
like London-based investment bank NM Rothschild & Sons and the elevation of
those minority interests to a stake in the holding company will boost
regulatory capital under
the incoming Basel III regime.
No cash changes hands but Basel III measures give a higher weighting to
capital held in such a way.
At the same time Paris Orleans will adopt the
takeover-proof French legal status "societe de commandite", a
limited-partnership structure that boosts the family's grip and keeps
majority voting rights even though it could end up with a smaller stake.
The Rothschilds' banking empire has over the centuries raised funds for
world powers and financed massive engineering projects such as the Suez
Canal and railways.