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The Acquisition of ABN AMRO Bank Case Study Analysis

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Part A)

           The ABN AMRO acquisition is known as the biggest banking takeover in the history and one of the failed mergers for several reasons. Royal Bank of Scotland’s (RBS), Fortis and Banco Santander formed a consortium and made a joint bid for taking over ABN AMRO bank during 2007. It all started in early 2007 when shareholders of ABN AMRO decided to sell off the entire business to a stronger bank. That was the only way for them to improve their performance and unlock bank’s valuation which according to them was languishing in the stock market for quite some time. Barclays were already negotiating with them for a friendly takeover; however, the RBS led consortium approached with a proposal that aimed at acquiring AMRO’s prized asset, LaSalle Bank, based at Chicago in the US. The offer was turned down because that necessitated a split up in ABN AMRO’s assets. Barclays’ offer was initially superior in the sense that they did not insist for any split in ABN AMRO’s assets and offered a sum of USD 91.2 billion for entire takeover. Countering Barclays offer, RBS consortium offered much higher price to the tune of USD 99 billion. Further negotiations continued between the concerned parties and a deal was struck at $100 billion between ABN AMRO and RBS consortium; however, the acquisition deal soon brought an unparalleled disaster for the consortium members (Kennedy, 2008).

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