The European Commission has opened an investigation into the sale of the Luxembourg unit of fallen Franco Belgian bank Dexia to an investor linked to the Qatari royal family.

The EC said the probe aims to find out whether the sale was conducted on market conditions and therefore does not contain any state aid element.

After the dismantling of Dexia, investors linked to Qatar's royals agreed to buy 90% of Dexia BIL and Luxembourg acquired 10% for €100m.

"Given that the proposed sale is the result of exclusive negotiations with one private investor ... the Commission has opened an in-depth investigation to assess whether the price of the transaction "is in line with its market valuation, it said in a statement.

The Commission added it "does not have enough information on the valuation of the carved-out businesses at this stage".

The Commission said an in-depth investigation gives interested third parties the possibility to submit comments on the sale and increases legal certainty.

First bailed out in 2008 at the height of the global financial crisis, Dexia could not cope with the turmoil of the euro zone debt quagmire and in October, France, Belgium and Luxembourg stepped in to wind up the bank.