Barclays buys ABN AMRO

Barclays has agreed to buy Dutch rival, ABN AMRO, in a 67 billion euros £46 billion all shares deal. The move - brought forward in part by reports that Royal Bank of Scotland was readying itself for a bid for ABN - will see Barclays pay 3.225 new shares for each ABN share, equivalent to 36.25 euros a share at Friday's closing price.

As part of the agreement, Barclays is to sell ABN's Chicago-based bank, LaSalle, to Bank of America for 21 billion £10.5 billion in cash. Ironically, it was Royal Bank of Scotland's interest in LaSalle that prompted it to consider a bid for ABN, given the move would have raised its profile in the US significantly.

Barclays and ABN meanwhile claim their deal will result in 3.5 billion euros of annual costs savings - no doubt due to the 23,600 jobs that are to go as the new entity prunes its global workforce by 10%.

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2007-04-23 11:04:43 © Moneyextra.com