Barclays Bank Backs Out of ABN Deal

http://www.insidearm.com/news/00002418-barclays-bank-backs-out-of-abn-deal/

London-based Barclays Bank said Friday that it will step aside in the buyout battle over Dutch bank ABN Amro, paving the way for a consortium led by the Royal Bank of Scotland to complete the largest bank merger ever.

Barclays announced in April that was buying ABN for around $91 billion. Very shortly thereafter, a consortium made up of RBS, Spain’s Banco Santander Central Hispano SA and Belgian-Dutch bank Fortis NV entered a larger bid for ABN. Ever since, the deal has gone through courts and shareholder votes and public announcements – some acrimonious – to arrive at the announcement today.

The all-encompassing credit crunch appears to have been the culprit, according to Barclays. The bank’s share price has fallen in recent months on its exposure to poor-quality consumer credit.

The RBS consortium’s official bid for ABN now stands at $101 billion, mostly in cash. The Wall Street Journal reported today that the deal could be announced as closed as early as October 19.

Barclays Bank Backs Out of ABN Deal

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