France's Caisse des Dépôts et Consignations is to sell its 35% stake in rival Caisse d'Epargne for €7bn ($8.8bn) after its partner of 150 years pledged to create a French asset management and investment banking powerhouse with another rival, Banque Populaire.

Francis Mayer, director general of La Caisse des Dépots et Consignations, had threatened to torpedo the proposed merger of Caisse d'Epargne and Banque Populaire after it was left out of initial discussions.