Barclays’ painful lesson: the rich(er) guys tend to win.
Barclays put a ton of money — to the tune of $90 billion — on the table to buy ABN AMRO so it could merge with it. But the consortium led by The Royal Bank of Scotland (RBS) put even more money on the table, and Barclays has finally thrown in the towel. More details from this WSJ story:
More context from yours truly:
- 16 August: Company of the Day entry on ABN AMRO
- 1 August: “Whither ABN Amro?”
- 15 May: “ABN AMRO, redux”
- 25 April: ” Seeking a new European Union . . . in banking.”
This outcome should only strengthen the position of the Royal Bank and its aggressive chief executive, Fred Goodwin. It should be interesting to see what RBS does next.
Category: Deals, Finance & Real Estate
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NewsVisual did an article and map on this deal a few months back http://www.newsvisual.com/newsvisual/2007/08/abnrbsfortis.html . According to their research, the corporate ties between RBS and ABN were quite strong, which played a role in ABN leaning towards RBS (along the higher offer). What do you think? Do you think corporate ties played a role?
Jason — Apologies for the delayed reply. Sure, I guess it’s *possible* that corporate ties between RBS and ABN played a role, but:
1. When ABN initially announced that it would sell the store, its chosen suitor was Barclays, not RBS.
2. The RBS consortium put many more billions (of dollars or euros, take your pick) on the table.
Sometimes the simplest explanation is the best. While the corporate ties are interesting - and might have led to some juicy conversations behind closed doors at ABN - in this case I think we need look no farther than RBS’s outsized checkbook.