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| Barclays agrees £45bn Dutch deal | Barclays agrees £45bn Dutch deal |
| (about 3 hours later) | |
| Britain's Barclays bank has agreed to merge with Dutch bank ABN Amro in a deal worth £45bn (66bn euros; $90bn). | |
| The move will create one of the world's biggest banks, valued at £94bn and with its headquarters in the Netherlands. | |
| 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. | 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. |
| A rival group led by the Royal Bank of Scotland (RBS) may also make a bid but has delayed a meeting with ABN Amro. | |
| Bidding war? | |
| The consortium, also including Spanish bank Santander - which owns the UK's Abbey - and Belgian bank Fortis, had planned to discuss its proposals with ABN Amro bosses on Monday. | |
| But it cancelled the meeting pending more details about ABN Amro's planned sale of its US arm LaSalle to Bank of America for $21bn - also announced on Monday - which RBS opposes. | |
| PROPOSED NEW COMPANY 47 million customers27 million credit card holders217,000 staffSales of £94bnUK-owned firmHeadquartered in Amsterdam | |
| Some analysts believe that RBS will offer a higher price for the Dutch bank, paving the way for a bidding war. | Some analysts believe that RBS will offer a higher price for the Dutch bank, paving the way for a bidding war. |
| The BBC's Business Editor Robert Peston said the Barclays offer faced major obstacles in the form of the rival consortium and the need to secure regulatory approval in 70 countries. | The BBC's Business Editor Robert Peston said the Barclays offer faced major obstacles in the form of the rival consortium and the need to secure regulatory approval in 70 countries. |
| Barclays and ABN stressed that they expect most of the cuts to their 217,000 workforce to be achieved through natural wastage. | Barclays and ABN stressed that they expect most of the cuts to their 217,000 workforce to be achieved through natural wastage. |
| I think Barclays may have played their hand already David Cumming, Standard Life Investments class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/23144/intraday.stm">Barclays' share price Barclays chief executive John Varley - who would head the combined business - described the deal as a "unique opportunity". | |
| The firm said it was not concerned about any rival offer and was focusing instead on the "growth opportunities" offered by its proposals. | |
| "The proposed merger will significantly enhance stand-alone product development capabilities and distribution," he said. | "The proposed merger will significantly enhance stand-alone product development capabilities and distribution," he said. |
| "Our combined geographic reach will ensure exposure to both developed and high-growth developing economies." | "Our combined geographic reach will ensure exposure to both developed and high-growth developing economies." |
| The enlarged group would have 47 million customers, including 27 million credit card holders. | The enlarged group would have 47 million customers, including 27 million credit card holders. |
| Regulated in Britain | |
| The proposed deal, which must be approved by regulators and shareholders of both firms, would see Barclays shareholders owning 52% of the enlarged Barclays Group and ABN Amro investors owning the remainder. | The proposed deal, which must be approved by regulators and shareholders of both firms, would see Barclays shareholders owning 52% of the enlarged Barclays Group and ABN Amro investors owning the remainder. |
| Barclays would continue to be regulated and pay tax in the UK as part of the deal. | Barclays would continue to be regulated and pay tax in the UK as part of the deal. |
| There could be a spate of cross border takeovers within Europe Robert Peston, BBC business editor Read Robert's analysis in full | There could be a spate of cross border takeovers within Europe Robert Peston, BBC business editor Read Robert's analysis in full |
| Barclays shares were down 2.5% in afternoon trading in London after the terms of the deal were announced. | |
| 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. | "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. | 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. | "I expect them to be favourites in the end," he said. |