Mergers, Acquisitions and Takeovers Case Study

Consolidation in the Banking Industry: The Case of ABN AMRO and Barclays

OR

Abstract:
When ABN AMRO announced in early 2007 that it was up for acquisition, it received many offers from major banks like Barclays, BBVA Spain, BNP Paribas, etc. ABN AMRO owned large retail banks in North America, Brazil and Italy. The activist investors, which included British hedge fund TCI, said that ABN should consider a sale or breakup to boost shareholder returns. Industry analysts felt that a combination of ABN and Barclays would make good strategic sense, but so would a deal with many of the big European banks. Any tie-up, which would be the biggest ever cross-border banking deal in Europe, would also be hard to implement. In addition to its strong retail presence in several countries, including the United States, where Barclays was trying to build up its investment banking business, ABN's retail-focused fund management arm could fit well with Barclays Global Investors, which mainly had institutional clients. Analysts were raising queries about how the ABN's investment bank business, which included UK corporate broker Hoare Govett, would fit with Barclays Capital.

Pedagogical Objectives:

• To consolidation in the banking industry.
• To the financial positioning of ABN AMRO and Barclays.
• To the synergies derived from the merger.
• To future challenges for the merger.

Keywords : Banking industry, ABN AMRO: Barclays, Royal Bank of Scotland, Consolidation, Commercial banking, Retail banking, Vereniging van Effectenbezitters, Hedge funds, Financial services, Banking products, Mergers and acquisitions, Private equity, Asset management, Transaction banking

Contents : 
ABN AMRO: Business Units
Global Retail and Commercial Banking
Investment Management Business of the Barclays and ABN AMRO
ABN AMRO: KEY FIGURES