British bank Barclays has agreed to buy Dutch rival ABN Amro in a €67 billion deal that is the world's biggest-ever bank takeover.
Barclays said today it would pay 3.225 new shares for each ABN Amro share, equivalent to €36.25 a share at Friday's closing price, to create a banking giant with 47 million customers and the world's biggest institutional asset manager.
The price, which includes the declared 2006 final dividend for ABN shareholders, is slightly higher than many analysts were expecting. But Barclays also said it had also agreed to sell ABN's Chicago-based US bank LaSalle to Bank of America for $21 billion, conditional upon its purchase of ABN.
Barclays has been forced to pay more by rival interest for ABN from a consortium led by Royal Bank of Scotland. The consortium, which includes Spain's Santander and Dutch-Belgian group Fortis, will to meet ABN's management later today.
ABN Chairman Rijkman Groenink said the ABN board would hear other offers in line with its fiduciary duties but said a merger with Barclays was the "best option" for shareholders.
ABN came under pressure from investors, including British hedge fund TCI, to consider a sale or break-up to boost shareholder returns after several years of under performance.
Barclays said the combination would result in annual pretax benefits of about €3.5 billion by 2010, and that it expected the deal to boost its earnings by 5 per cent by the same date.
It said 23,600 jobs could be cut from the combined workforce, including 10,800 positions moving offshore. Barclays shareholders will own about 52 per cent of the enlarged company, to be called Barclays.