MercoPress. South Atlantic News Agency

UK Barclays and ABN Amro agree to largest bank merger

ABN-Barclays in world record merger

Britain's Barclays bank agreed to merge with Dutch bank ABN Amro in a deal worth 90 billion US dollars, creating one of the world's largest banks with a turnover of 190 billion US dollars.

The companies said about 12,800 jobs would be cut as a result of the merger while a further 10,800 jobs would be moved to low-cost locations. The proposed new company will have 47 million customers (90% concentrated in seven countries); 27 million credit card holders; 217.000 staff and will be headquartered in Amsterdam. It will be the world's largest institutional asset manager as well as the eighth largest wealth manager. A rival group led by the Royal Bank of Scotland (RBS) may also make a bid but has delayed a meeting with ABN Amro. The consortium, also including Spanish bank Santander - which owns the UK's Abbey - and Belgian bank Fortis, had planned to discuss its proposals with ABN Amro bosses on Monday. But it cancelled the meeting pending more details about ABN Amro's planned 21billion US dollars sale of its US arm LaSalle to Bank of America - also announced on Monday - which RBS opposes. However some analysts believe Barclays offer faced major obstacles in the form of the rival consortium and the need to secure regulatory approval in 70 countries. Barclays said it was not concerned about any rival offer and was focusing instead on the "growth opportunities" offered by its proposals. "The proposed merger is expected to complete during the fourth quarter of this year", said Barclays chief executive John Varley set to lead the combined group. The proposed deal, which must be approved by regulators and shareholders, would see Barclays shareholders owning 52% of the enlarged Barclays Group and ABN Amro investors owning the remainder. Barclays would continue to be regulated and pay tax in the UK. Barclays' shares were down 2.5% in afternoon trading in London after the terms of the deal were announced. One analyst said it was far from certain Barclays would be successful, as the RBS consortium may offer a higher price since its proposal would guarantee more cost savings.