Barclays, ABN Amro - Shareholders Have Deep Concerns

Stephen Harris

20 March 2007

Shareholders in both Barclays and ABN Amro have deep concerns about the banks' proposed £80 billion ($156 billion) merger and may obstruct a deal, according to the Daily Telegraph. The two banking giants yesterday confirmed speculation that they have been in exclusive preliminary discussions with a view to a possible merger that would create the world's fifth largest banking group. ABN investors are concerned that a merger would not give them a large enough premium, while Barclays shareholders worry that a deal would disproportionately dilute their investment. The combined bank would be run by Barclays chief executive officer John Varley and headquartered in Amsterdam, according to a report in the Wall Street Journal. Board seats and other senior management positions would be split between the ranks of the two banks, according to a broad agreement negotiated largely between Mr Varley and ABN Amro chief executive Rijkman Groenink.