Barclays, Amro agree on deal

| April 23, 2007 | 0 Comments
Barclays, Amro agree on deal

It was reported on Monday that Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642) has agreed to a merger deal with ABN Amro (Euronext: AAB; NYSE: ABN) that is worth £45 billion. The new bank that will be created if the deal is finalized will have 47 million customers, service 27 million credit card holders, and employ 217,000 staff. In the announcement of the deal, the banks said that around 12,800 jobs would be cut and 10,800 others will be shifted to lower-cost locations. The new bank, while under UK ownership, will be headquartered in Amsterdam.

The news of the bid put on hold a scheduled Monday meeting between Amro and a group led by the Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) and including Spanish bank Santander (LSE: BNC; NYSE: STD), which is thinking about making a bid. Many analysts believe that RBS is ready to offer more for Amro than Barclay’s has bid, which could set off a bidding war for the Dutch bank. Another offer is just one possible roadblock for the Barclays offer; the proposed deal must get regulatory approval in 70 nations before it can go forward. The deal will also have to be approved by shareholders of both banks.

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