Product details

The saturated growth prospect of ABN AMRO, the European banking giant, forced its supervisory board to actively initiate a merger, acquisition or break up of the bank. Barclays was the first to negotiate the merger with ABN AMRO. But ABN AMRO was counter bid by Royal Bank of Scotland (RBS), who along with Belgian-Dutch bank Fortis and Banco Santander of Spain formed a banking consortium and went for a royal bid in an attempt to beat the offer laid down by Barclays, one of its top rivals. The offer included 70% cash and 30% share holding components. With the fulcrum leaning RBS consortium's way, the twist of the tale took place when the most profitable Chinese bank, China Development Bank (CDB) joined hands with Barclays in order to increase its bidding value. But the revised bid price of Barclays still remained below RBS consortium's royal bid. The only advantage that Barclays had was the initiative to merge with ABN AMRO, keeping the bank and its shareholders' value intact, rather than breaking the bank into several units. With both bids having their own advantage, the future of ABN AMRO remained a decisive factor in the hands of its share holders and the future market conditions.