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Barclays agrees £90bn Dutch deal Barclays agrees £90bn Dutch deal
(20 minutes later)
Barclays has agreed a deal to merge with Dutch bank ABN Amro. Britain's Barclays bank has agreed to merge with Dutch bank ABN Amro.
The deal will create one of Europe's largest banks, with sales of more than £90bn and its global headquarters based in the Netherlands. The deal will create one of world's largest banks, with sales of more than £90bn and its global headquarters based in the Netherlands.
But ABN Amro has also agreed to talk to another consortium headed by the Royal Bank of Scotland about a rival offer. The companies said about 12,800 jobs would be cut as a result of the merger, while a further 10,800 jobs would be moved to low-cost locations.
Some analysts believe that Royal Bank of Scotland will offer a higher price for the Dutch bank, paving the way for a bidding war. ABN has also agreed to talk to another consortium headed by the Royal Bank of Scotland (RBS) about a rival offer.
Some analysts believe that RBS will offer a higher price for the Dutch bank, paving the way for a bidding war.
'Favourites'
Barclays had been in exclusive negotiations with ABN Amro until Friday but the Dutch bank said it would open discussions with the RBS on Monday.
I think Barclays may have played their hand already David Cumming, Standard Life Investments
Royal Bank's partners include Spanish firm Banco de Santander, which owns Britain's Abbey bank.
One analyst said it was far from certain that the Barclays deal would be successful.
"I think Barclays may have played their hand already," David Cumming, from Standard Life Investments, told the BBC.
Mr Cumming said the RBS consortium could offer a higher price because their proposal would guarantee more cost savings.
"I expect them to be favourites in the end," he said.
Barclays is expected to sell LaSalle, ABN Amro's US business, should its deal be approved, although any bid would have to be approved by shareholders and regulators.
Barclays and ABN currently have a combined workforce of about 217,000.