RBS Seal The ABN Amro Deal

by Stewart Douglas

Story link: RBS Seal The ABN Amro Deal

The Royal Bank of Scotland has today announced it has come out on top in the bid to secure ABN Amro, the Dutch commercial bank which has been a takeover target in recent months, and the subject of prolonged negotiation and deal-making.

The consortium led by the Royal Bank of Scotland comprising of several top-rate European banks beat Barclays to takeover the Dutch bank in what has been an eight month saga of negotiation and struggle finally come to a conclusion.

The Barclays offer fell through last week after surpassing a set deadline for majority shareholder support, which was ultimately never met, and has cast doubt as to the future direction of Barclays and its investment strategy.

Meanwhile the more valuable RBS led bid was accepted by a resounding 86% of ABN Amro shareholders, above the 80% threshold required to secure the deal.  It is thought that the higher cash value on the table was the most influential factor in the decision, coming in at around £49 billion.

The takeover is thought to prompt a breakup of the ABN Amro company amongst the parties to the bid.  At present it is thought that the Royal Bank of Scotland will assume the investment banking division and wholesale lines of ABN Amro, whilst Santander, the bank that owns the Abbey, looks set to takeover the Italian division of the ABN Amro operation.

European powerhouse Fortis are also in on the deal, looking set to assume the Dutch line of the ABN Amro business upon its division over the next few weeks.

Whilst it is thought that the process of transferring the assets of the bank and integrating the distinct divisions within their respective corporate structures will take place over the course of the next few weeks, analysts have raised some questions as to Barclays next move, after what has been an embarrassing set back for the bank.