ABN Amro and Barclays have jointly announced that agreement has been reached for the two banks to merge to create what they claim will be the world's eighth largest wealth manager and the world's largest institutional asset manager.

ABN Amro and Barclays have jointly announced that agreement has been reached for the two banks to merge to create what they claim will be the world's eighth largest wealth manager and the world's largest institutional asset manager. The holding company of the combined group will be called Barclays PLC and its head office will be located in Amsterdam. The proposed merger will see ABN Amro shareholders receiving 3.225 ordinary shares in Barclays for each existing share. Under the terms of the offer, Barclays existing ordinary shareholders will own approximately 52 per cent and ABN Amro existing ordinary shareholders will own approximately 48 per cent of the combined group. The deal values ABN Amro ordinary share at €36.25, a 33 per cent premium to the share price on 16 March 2007, the last trading day prior to the announcement that ABN AMRO and Barclays were in talks and a 49 per cent premium over the average share price in the 6 months up to and including to 16 March 2007. The combined group will have a UK corporate governance structure with a unitary board. Arthur Martinez will be the chairman, John Varley will be the chief executive officer, and Bob Diamond will be president. The new board will initially consist of 10 members from Barclays and 9 members from ABN Amro. A condition of the deal is that Bank of America will acquire LaSalle Bank, which has 143 branches, for $21 billion, a transaction which is expected to complete before completion of the offer. The deal will make BoA the largest bank in Chicago. The proposed merger is expected to complete during the fourth quarter of 2007.