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| Barclays agrees £45bn Dutch deal | |
| (10 minutes later) | |
| Britain's Barclays bank has agreed 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 world's largest banks, with sales of about £45bn ($90bn; 66bn euros) and its global 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. |
| ABN has also agreed to talk to another consortium headed by the Royal Bank of Scotland (RBS) about a rival offer. | 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. | Some analysts believe that RBS will offer a higher price for the Dutch bank, paving the way for a bidding war. |
| 'Unique opportunity' | 'Unique opportunity' |
| 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. | 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 | I think Barclays may have played their hand already David Cumming, Standard Life Investments |
| Royal Bank's partners include Spanish bank Group de Santander, which owns Britain's Abbey bank and Belgian bank Fortis. | |
| Barclays chief executive John Varley - who will head the combined business- described the deal as a "unique opportunity". | Barclays chief executive John Varley - who will head the combined business- described the deal as a "unique opportunity". |
| 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. |
| "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 proposed deal, which must be approved by shareholders of both firms and regulators, 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 shareholders of both firms and regulators, would see Barclays shareholders owning 52% of the enlarged Barclays Group and ABN Amro investors owning the remainder. |
| Under the terms of the deal, | |
| The deal is likely to result in a significant reduction in the two firms' combined workforce of about 217,000. | The deal is likely to result in a significant reduction in the two firms' combined workforce of about 217,000. |
| But the firms stressed that they expected most of job losses to be achieved through natural wastage. | But the firms stressed that they expected most of job losses to be achieved through natural wastage. |
| Rival proposal | Rival proposal |
| But one analyst said it was far from certain that the Barclays deal would be successful. | But 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. |
| Independent of the Barclays deal, ABN Amro has said it will sell LaSalle, its US business, to Bank of America for $21bn. | Independent of the Barclays deal, ABN Amro has said it will sell LaSalle, its US business, to Bank of America for $21bn. |