LONDON, Oct 8 (Reuters) Three banks led by Royal Bank of Scotland said on Monday they now hold around 86 percent of Dutch rival ABN AMRO, confirming a hard-won victory as the trio prepares to seal the biggest-ever banking takeover.
RBS and partners Santander of Spain and Belgian-Dutch bank Fortis are now set to declare their almost 72 billion euro (1.5 billion) bid for ABN unconditional by the end of the week, bringing to an end a seven-month battle for control of the Netherlands' largest bank.
After shareholder approval, the final step of making the offer unconditional requires further hurdles to be overcome, including the closing of a 13 billion euro Fortis rights issue.
RBS and its partners, who plan to carve up ABN, had been almost certain to win support from the majority of ABN's shareholders -- especially after rival bidder Barclays withdrew last week, with only 0.2 percent of ABN shares.
Barclays was initially ABN's preferred bidder, but a fall in its stock hit the value of its mostly shares offer and forced ABN to switch to a neutral stance between bidders.
As the takeover nears its close this week, investor attention will shift to the unprecedented integration challenge and to concerns that the three may have overpaid to win the day.
In a parting salvo, Barclays CEO John Varley said on Friday he believed the consortium had paid too much, as ABN's intrinsic value had been dented by the summer's financial markets turmoil.
The trio of banks is expected to move swiftly to demonstrate the value of the ABN deal at a critical point in the banking cycle -- particularly for consortium leader RBS, set to take on ABN's businesses most affected by the capital market turbulence.
''The pressure starts for them now they have the acceptances -- they need to crack on with what they want to do,'' fund manager Colin Morton at Rensburg Fund Management said.
''The next 12 or 18 months are going to be crucial -- can they deliver? Are they going to struggle? The battle with Barclays is over, but now we have to see how this works.'' TOO MUCH? All three consortium banks have a good track record for integrating acquisitions, but ABN will pose complex cross-border and regulatory issues. Many see it as a test case for whether major group takeovers -- and carve-ups -- can work.
The breakup of ABN will involve 4,500 branches across 53 countries and unraveling businesses ranging from cash management operations in Asia to retail banking in Brazil.
RBS missed out on getting ABN's prized U.S. bank LaSalle but will pay almost 16 billion euros for the wholesale and investment banking business and ABN's Asian operations.
RBS is no stranger to tricky deals after buying 26 businesses worth a combined 33 billion pounds since 1999, including the transformational purchase of NatWest in 2000.
Santander, which will get ABN's Italian and Brazilian unit, has made a string of big deals, including the purchase of British bank Abbey in 2004. Fortis has made about 40 deals in the last 15 years.
The consortium has said it is likely to cut fewer jobs than the 23,600 Barclays had expected to cut as part of its plan.
But a sharp deterioration in capital markets in August and September has raised concern the trio will struggle to achieve the revenue benefits they have projected, even if they achieve the cost synergies.
RBS alone expects to deliver cost savings of just over 1.2 billion euros -- 1.3 billion euros including its share of savings from ABN's central costs.
REUTERS SI BD2225
RBS and partners Santander of Spain and Belgian-Dutch bank Fortis are now set to declare their almost 72 billion euro (1.5 billion) bid for ABN unconditional by the end of the week, bringing to an end a seven-month battle for control of the Netherlands' largest bank.
After shareholder approval, the final step of making the offer unconditional requires further hurdles to be overcome, including the closing of a 13 billion euro Fortis rights issue.
RBS and its partners, who plan to carve up ABN, had been almost certain to win support from the majority of ABN's shareholders -- especially after rival bidder Barclays withdrew last week, with only 0.2 percent of ABN shares.
Barclays was initially ABN's preferred bidder, but a fall in its stock hit the value of its mostly shares offer and forced ABN to switch to a neutral stance between bidders.
As the takeover nears its close this week, investor attention will shift to the unprecedented integration challenge and to concerns that the three may have overpaid to win the day.
In a parting salvo, Barclays CEO John Varley said on Friday he believed the consortium had paid too much, as ABN's intrinsic value had been dented by the summer's financial markets turmoil.
The trio of banks is expected to move swiftly to demonstrate the value of the ABN deal at a critical point in the banking cycle -- particularly for consortium leader RBS, set to take on ABN's businesses most affected by the capital market turbulence.
''The pressure starts for them now they have the acceptances -- they need to crack on with what they want to do,'' fund manager Colin Morton at Rensburg Fund Management said.
''The next 12 or 18 months are going to be crucial -- can they deliver? Are they going to struggle? The battle with Barclays is over, but now we have to see how this works.'' TOO MUCH? All three consortium banks have a good track record for integrating acquisitions, but ABN will pose complex cross-border and regulatory issues. Many see it as a test case for whether major group takeovers -- and carve-ups -- can work.
The breakup of ABN will involve 4,500 branches across 53 countries and unraveling businesses ranging from cash management operations in Asia to retail banking in Brazil.
RBS missed out on getting ABN's prized U.S. bank LaSalle but will pay almost 16 billion euros for the wholesale and investment banking business and ABN's Asian operations.
RBS is no stranger to tricky deals after buying 26 businesses worth a combined 33 billion pounds since 1999, including the transformational purchase of NatWest in 2000.
Santander, which will get ABN's Italian and Brazilian unit, has made a string of big deals, including the purchase of British bank Abbey in 2004. Fortis has made about 40 deals in the last 15 years.
The consortium has said it is likely to cut fewer jobs than the 23,600 Barclays had expected to cut as part of its plan.
But a sharp deterioration in capital markets in August and September has raised concern the trio will struggle to achieve the revenue benefits they have projected, even if they achieve the cost synergies.
RBS alone expects to deliver cost savings of just over 1.2 billion euros -- 1.3 billion euros including its share of savings from ABN's central costs.
REUTERS SI BD2225
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