Barclays in £45-billion merger deal with ABN Amro

The UK's Barclays bank, which had been in exclusive negotiations, say that it has agreed to merge with Dutch bank ABN Amro, which is also being wooed by a three-bank European consortium led by the Royal Bank of Scotland (RBS).

The proposed £45-billion (approximately Rs376,515) deal will create one of the world's largest banks, with combined sales of £94 billion and its headquarters in the Netherlands, with Barclays shareholders owning 52 per cent of the strengthened Barclays Group, with ABN Amro's shareholders owning the remainder.

If the shareholders and regulators approve, the combined group would have 47 million customers, including 27 million credit card holders and close to a quarter million employees. Barclays had announced the shifting of its headquarters to Amsterdam, in a bid to smoothen ruffled Dutch sentiments. With a successful merger, ABN Amro would continue to be headquartered in Amsterdam but will now become a British firm.

The proposed deal, slated to be headed by Barclays chief executive John Varley would require the backing of shareholders of Barclays and ABN Amro and the regulators of not only the the UK and the Netherlands, but also regulatory approvals in the 70 countries the two entities operate in.
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On Friday ABN Amro had said it would open discussions with the RBS-led consortium on Monday about a rival offer, which analysts said could offer a higher price and pave the way for a bidding war.

In an unrelated deal, ABN Amro has announced its intention to sell its US business LaSalle to Bank of America for $21 billion.