Credit Agricole made an agreed bid worth €56 per share for Credit Lyonnais, to create a bank with €22 billion in equity, the banks said.
The main offer is two-thirds cash, one-third shares, under which Credit Agricole is offering five of its own shares plus €148.24 in cash for every four Credit Lyonnais shares held.
Credit Lyonnais shares opened higher while Credit Agricole fell when trading in the two stocks resumed at 1 p.m.
At 1.55 p.m, Credit Lyonnais was up €1.50 or 2.8 per cent at €54.25 and Credit Agricole was down €0.71 or 4.7 per cent at €14.44.
BNP Paribas, which will not now make a bid of its own for Credit Lyonnais, rose €2.37 or 6.3 per cent to €40.09. Societe Generale, seen as the next bid target in the process of French banking consolidation, rose €4.30 or 8.3 per cent to €56.20.
The CAC-40 index was up 69.01 points or 2.2 per cent at 3,145.86.
Allianz AG's French unit AGF, Commerzbank AG, Banco Bilbao Vizcaya Argentaria SA and IntesaBci have all committed their Credit Lyonnais holdings to Credit Agricole's €56-per-share offer for the bank, the CMF said.
The companies hold a total 20.2 per cent of Credit Lyonnais capital, while Credit Agricole last week said it had built up a 17.4 per cent stake.
Credit Agricole and Credit Lyonnais said they expect their plan to generate €760 million of annual savings by 2006, with €490 million of savings coming from its corporate and investment banking operations in the next two years.
They said synergies from retail banking activities should reach €110 million over three years, with ROE of 15 per cent targeted for 2005.
Agencies