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The IDB Group has signed a cooperation agreement with Europe's second-largest bank, Credit Agricole group (CA), via the latter's international corporate and investment banking unit, Calyon.

The deal heralds the French banking giant's entry into the local market. It also signals that IDB, owned by Nochi Dankner, is expanding ties with international financial institutions prior to carrying out mergers and acquisitions abroad as part of its growth strategy.

Calyon will identify for IDB merger and acquisition opportunities abroad, according to the agreement. The bank also will extend significant amounts of credit to IDB as needed.

IDB is interested in carrying out up to two major investments worth $1 billion to $2 billion each through Koor Industries, which will become the bank's international operations arm once it completes acquisition of the concern.

Calyon heads recently visited the country, and met with Finance Ministry Director General Joseph Bachar along with other local leaders. The bank's executives told Bachar in the meeting that they are interested in undertaking wide-scale operations in Israel.

The group has ties with several institutions here, but the IDB deal appears to be its most significant step in Israel. Bachar told the bank's officials that he ascribes great importance to the entry of foreign investors into the local market.

The Banker magazine rates CA as one of the world's five leading banks and Europe's second largest. The group employs 134,000 people in 60 countries and has a nearly $50 billion market value.