Barclays concessions to ABN in negotiations cause concerns

Among the details discussed when Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) outlined its plans for talks toward a merger with ABN Amro (Euronext: AAB: NYSE: ABN), was its intention to move its headquarters to Amsterdam if the merger proceeds. Barclays also intends to allow the entity created by such a merger, which would become the fifth largest financial group in the world, to be regulated primarily by the Dutch central bank, although it says that it would keep its primary share registry with the London Stock Exchange, and maintain a secondary listing in Amsterdam.

While Barclays claims that moving headquarters would likely not impact employees at its current headquarters, there are still concerns that jobs would be lost in the UK should such a move take place. The Amicus trade union said that it has been assured by the bank that if a merger seems likely to go ahead, there will be a meeting of the European Works Council to brief trade union representatives on the repercussions of the move. However, Amicus is said to be seeking assurance that if the merger takes place, jobs will not be lost in the UK.

The issue of regulation is likely to undergo detailed scrutiny, with both the Financial Services Authority in the UK and the US Securities and Exchange Commission also having grounds to be concerned about which rules will guide how a merged bank will operate.

Analysts have expressed the opinion that Barclays is making so many concessions to ABN so early in the negotiating process in an effort to bring the proposed deal to a quick and friendly close, before other bidders have a chance to make better offers. A number of other banks have already said they might be interested in all or part of ABN’s operations, and there are still others who are thought to be interested in a possible bid for the Dutch bank.

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