La Poste and Insurance giant CNP are to merge in a deal where La Caisse des Depots et Consignations, or CDC in exchange for a stake in the French postal operator.

The French government already owns CDC.

When the exchange takes place, La Poste is to merge its existing bank La Banque Postale with CNP Assurances to expand the range of services it provides.

This is part of a wider strategy by the French government to build up a state-owned company providing banking and insurance services to French rural areas that are often neglected by private financial services.

“You can see that there is an absolute necessity to reinvent La Poste’s business,” Finance Minister Bruno Le Maire said at a news conference to announce the deal, adding that postal services were declining 7 percent a year and losing 560 million euros ($654.58 million) a year in revenue.