ABN Amro Agrees to Sell Itself to Barclays for $91 Billion

ABN Amro has agreed to sell itself to Barclays for $91 billion (€67 billion) in the biggest financial services transaction in history. The offer amounts to $49.27 (€36.25) per share and includes 3.225 Barclays shares for each ABN share. That represents a 33% premium to ABN's closing price on March 16, the day before talks were announced. ABN has also disclosed that it is selling LaSalle Bank, its U.S. asset, to Bank of America for $21 billion. The sale of LaSalle is thought by some analysts to be an attempt by ABN to thwart a rival bid by reducing the Dutch bank's appeal to a consortium led by the Royal Bank of Scotland. That consortium, the other members of which are Banco Santander Central Hispano and Fortis NV, will meet with Groenink today. Regardless who ultimately wins ABN, the takeover of the bank is expected to unleash a series of European mergers in a sector considered ripe for consolidation. In related news, Royal Bank of Scotland has dismissed as "nonsense" a report in the Sunday Times of London that it will make a solo bid for ABN without Santander or Fortis.

Sources: New York Times, Wall Street Journal, Bloomberg (I, II)
Commentary: Memo to Barclays: ABN Amro's US Banks Are a Mixed Bag • Barclays To Acquire ABN: Long-term Investor Horizon Required • Trio of European Banks Eyes ABN Amro
Stocks/ETFs to watch: ABN Amro Holding N.V. (ABN), Barclays PLC (BCS), Royal Bank of Scotland Group plc [ADR] (RBSPY), Fortis NV [ADR] (FORSY), Bank of America Corp. (BAC). Competitors: HSBC Holdings plc ADR (HBC), Deutsche Bank AG (DB), UBS AG (UBS). ETFs: First Trust Morningstar Div Leaders Idx (FDL), PowerShares Intl Dividend Achievers (PID), iShares MSCI Netherlands Index (EWN)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

Comments

[Mr. Finance:]

How well are ABN AMRO and Barclays Connected Before the Merger?
According to IntellectSpace, only one common connection exists between the Board of Directors of Barclays and ABN AMRO. This signifies a weak relationship between the two firms and may jeopardize the merger talks between them. The following Knowledge Map shows the only common Board connection - between Matthew Hickman and Hans Joerg Rudloff via CSFB. fn.intellectspace.com/... (View in IE Explorer 4.0+ only)


However, there is a strong relationship between the banks' executives. The Knowledge Map below shows that Lazard, Bank of New York, Lehman Brothers, and other financial institutions act as a common thread between ABN Amro and Barclays. fn.intellectspace.com/... (View in IE Explorer 4.0+ only)

Common relationships between LeSalle and Bank of America can be found here: fn.intellectspace.com/...

2007 Apr 23 03:04 PM