Speculation about a possible tie-up rose after the Belgian newspaper Le Soir suggested that Fortis was targeting Dexia as part of its desire to capitalize on what it sees as a European financial services market ripe for consolidation.
A merger between Fortis and the Brussels-based bank would create an entity with revenues of circa E14 billion and a market capitalization of E50 billion, according to the newspaper report.
However, following a board meeting to discuss Fortis' move, Dexia has decided to reject the idea of a merger.
A statement released by the bank explained: "Further to the article published in the Belgian press on September 21, 2005, Dexia was contacted by representatives of Fortis who submitted a proposal to examine jointly a project of bringing together the two groups.
"Having considered the situation, Dexia's management board has examined the opportunity to start discussions with Fortis. The members of the management board have unanimously found that it was neither desirable nor advisable to proceed with such a study."