Barclays opens buy out talks with ABN AMRO

Our Banking Bureau
20 March 2007

The UK's third biggest bank, Barclays, has confirmed that it is in exclusive talks for $160 billion merger with ABN AMRO, the biggest Dutch bank, that would create the world's largest financial-services acquisition.

ABN Amro has a market capitalisation of $67.18 billion compared to Barclay's $87.41 billion. Barclays is expected to clarify its position later today.

Reports, meanwhile, indicate several other suitors have also approached ABN Amro with offers either to buy the bank in part or in its entirety. They include BNP Paribas, ING and BVA, the reports said.

Barclays and ABN held talks two years ago when they first explored the possibility of a merger.

Barclays, wants access to ABN's foreign businesses, in particular its Asian operations, analysts said. A Barclays-ABN merger would create a bank with 47 million customers and 220,000 staff worldwide. It also may prompt other bids for ABN and Barclays itself.

It was earlier known as a diamond financing bank, but after being in India for 81 years, ABN AMRO has spread its reach far and wide, from commercial, retail, investment banking and even to the asset management business.