The French government has announced that France's No. 1 mutual insurer, Groupama, and Switzerland's largest life insurer, Swiss Life, are now the only bidders left in the race for the acquisition of state-owned French insurer Groupe des Assurances Nationales (GAN).

The two companies were given seven business days to submit their final offers, which they must file with France's Finance Ministry by close of business on June 17, 1998.


The finance minister, Dominique Strauss-Kahn, has indicated that he will announce the name of the successful bidder at the beginning of July.

Robert Eichenberger, head of investor relations at Swiss Life, said his company was obviously ''happy about'' making the short-list: ''GAN fits in with our strategy for expansion into Europe, according to our corporate vision. France is a very important market. We are, of course, hopeful, but it's difficult to judge how your application will go and the Finance Ministry cannot tell you anything in this regard. We will hear at the end of June, beginning of July.''

Swiss Life holds a market share of 33 percent in Switzerland and is one of the top six life insurers in Europe.

The price tag attached to GAN is very much an unknown quantity, explained Kevin Ryan, insurance analyst at Japanese stockbrokers Nikko Europe. ''We don't know what the bidders have been shown and therefore don't know what it's worth.'' It all depends, he added, if it's being sold ''warts and all.''

This announcement means that the two other companies who were bidding for GAN, U.S. insurance giant American International Group and the pan-European insurance alliance of insurers, Eureko, are now out of the race.


In fact, in the press announcement from the Finance Ministry announcing that Groupama and Swiss Life were going forward as the two short-listed bidders, AIG and Eureko did not even receive a mention, let alone an explanation as to why they had not made it through to the final round.

According to the French press agency, AFP, however, Mr. Strauss-Kahn is quoted as saying on June 11 that the selection process for the two short-listed bidders had been made according to ''the standard criteria,'' with emphasis on comparisons being made, notably on price.

The official press statement from the Finance Ministry also said that Mr. Strauss-Kahn would be consulting with trade union officials represented at GAN to make sure their views were also considered before a final decision was made.

Jeff Medlock, managing director of Eureko, commenting on not making it into the final bidding, said, ''It's not the end of the world, but, of course, we're disappointed as we had put a lot of effort into our application.''


He said no explanation had been offered to him by the Finance Ministry: ''We haven't been given any reason, we can only speculate. The French press have said the decision centered on price, but we don't really know. I would imagine in our follow-up conversations with the ministry we will get a better idea and, of course, we'll see when the final acquisition price is known.''

Mr. Medlock said Eureko was still interested in expanding into France, where it does not have a presence.

Partnership was the preferred option, he confirmed, but ''opportunities to acquire in France are fairly limited. We believe in strong companies - GAN represented an unique opportunity.''

He said Eureko was ''a bit surprised because we thought our proposal was quite attractive.''

Eureko had planned to keep GAN as a separate company, thus maintaining its own culture and integrity, he said, while the other bidders were looking, he thought, to merge GAN into their own existing operations.

One rumor in the market, according to Nikko analyst Mr. Ryan, was that the reason AIG had been eliminated was to do with the price it was offering.

Another rumor about why AIG was eliminated, he said, was that the U.S. insurer had refused to speak to any of the French labor unions and make any guarantees about people's jobs.

Possible sale prices quoted for GAN have ranged from between 13 billion francs ($2.1 billion) and 17 billion francs ($2.8 billion).