Mates, the word is out! Barclays PLC and ABN Amro NV have both confirmed that they will merge to become the largest European bank. In doing so, Barclays will buy-out ABN share by offering US$49.25 (GBP24.58) or 3.225 ordinary shares of the new group for each ABN share. ABN will be no longer, and in joining Barclays, they will also sell their US subsid LaSalle Bank to the American's Bank of America for $21 billion in cash. All in all, the total deal will be worth US$91.16 billion (GBP45.50 billion).
ABN Amro had been going through major restructuring over the past few years, with layoffs higher than ever before. Associates of mine complained on the poor morale and corporate culture. This buy-out should really turn things around. The merger will create only one bank, which will be headquartered in Amsterdam, eliminating the name ABN Amro to remain solely as Barclays PLC.
The not so fortunate news will be that at least 12,800 jobs will be cut down by the new entity to create a total work force of 217,000 globally. Most will come from conflicting positions in middle to back-office roles. The more fortunate news is that Rijkman Groenink, ABN Amro's CEO still does not know where he will be sitting in the new company. Hopefully the janitorials room, better yet if he gets ousted. Major shareholders and investors have deemed his performance as the CEO to be underperformed to say the least.
The sale of the LaSalle Bank is possibly the first of others to come. Barclays has further confirmed that ABN will continue in talks with Royal Bank of Scotland PLC, Spain's Banco Santander Central Hispano SA and Belgian-Dutch bank Fortis NV for possible talks of spinning-off other underperforming units that Groenink created.
I'm a Barclays shareholder, which explains my optimism in the deal.