In 2015, Swiss-listed bank Edmond de Rothschild Group, now headed by the late Edmond's son Benjamin and his wife Ariane, took legal action against Paris-based Rothschild & Co, headed by Benjamin's nephew Alexandre.

Benjamin and Ariane accused their relatives of causing confusion by using the Rothschild name as a standalone brand, saying that potentially infringed on other family members.

In the settlement reached on Friday, the two sides agreed to always use other distinctive elements alongside the family name to identify themselves.

"Neither group may use the name Rothschild on its own in any form whatsoever in the future," the firms said in a joint statement.

Rothschild & Co will stop using the website domain, a company spokeswoman said. It will now use the name Rothschild Martin Maurel for private banking activities in France, Belgium and Monaco, while its French investment banking operation will still be called Rothschild & Co.

Use of the name is sensitive because some family members are concerned the creation of a consolidated Rothschild brand could potentially lead to its sale to an outside buyer, limiting the ability of future generations to benefit from it.

Founded by Mayer Amschel Rothschild in the 18th century, the dynasty has worked on some of history's biggest deals, including helping finance Britain's war against Napoleon's France.

The agreement brings to an end the litigation and seals a reconciliation between the cousins. "The two groups have also agreed to work together to protect the family name in the banking sector," the joint statement said.

As part of the deal, both firms decided to unwind stakes they own in each other. That will result in Rothschild & Co paying 75 million euros ($87.38 million) in cash to Edmond de Rothschild, the companies said.

The transaction will result in a degradation of Rothschild & Co's capital adequacy ratio by a little more than one percentage point to 17.3 percent, while Edmond de Rothschild's adequacy ratio will rise by 0.6 percentage points to 28.4 percent.

(Reporting by Inti Landauro, Sudip Kar-Gupta; Editing by Luke Baker)

By Inti Landauro