Barclays and ABN Amro agree initial terms

21 March 2007

Barclays bank and ABN Amro have issued statements indicating they have reached agreement on some of the terms of a proposed merger.

The two banks, whose merger would represent the largest-ever cross-border transaction, have concurred that the chairman of the new company is to be selected by ABN Amro's board, while overall leadership will be assumed by a chief executive officer chosen by the British bank.

It has also been agreed that the company's head office will move to Amsterdam and that its holding company will be in the UK and listed primarily on the London Stock Exchange with a secondary listing on the Euronext Amsterdam.

Ed Collins, of New Star Asset management, told Bloomberg: "A significant barrier to the deal being done has been cleared.

"Deciding the personalities involved is almost as important as deciding on the price. It shows a willingness on both sides for the negotiations to continue positively," he added.

Since news broke of the banks' intentions to station the new company's headquarters in Amsterdam, the 1,000 staff currently employed in Barclays' London offices have voiced concern about the future of their positions.

Should the takeover prove successful it will create a global bank will a market value of over $160 billion.

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