The Acquisition of ABN AMRO (A)
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Case Code: BSTR345 Case Length: 20 Pages Period: 2007 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.300 Organization: ABN AMRO, Royal Bank of Scotland, Fortis, Banco Santander Central Hispano Industry: Banking, Financial Services Countries: UK, Belgium, Spain, The Netherlands Themes: Mergers, Acquisitions, Strategic Alliances |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Consortium Vs Barclays
The story of ABN AMRO's acquisition started back in 2005 when Sir Fred Goodwin the Chairman of RBS expressed his interest in acquiring ABN AMRO mainly so as to get control of ABN AMRO's prized asset, the Chicago based subsidiary - La Salle Bank...
Financing the Acquisition
The consortium led by RBS, Fortis and Santander jointly shared the consideration payable to ABN AMRO shareholders. Out of the total consideration of US$ 100 billion, 93 percent would be paid in cash and the remaining 7 percent by issuing the shares of RBS. Out of the total consideration, RBS agreed to pay US$ 38.25 billion, Fortis US$ 33.75 billion, and Banco Santander the remaining US$ 27.99 billion...
The Integration Efforts
Integrating the operations of ABN AMRO was the biggest challenge for consortium banks, as they had to divide the operations of ABN AMRO among themselves. RBS was chosen to lead the consortium and ensure compliance of regulatory norms in the process of integration. Until the divisions were formally separated and integrated with the banks, RBS would own 38.3 percent, Fortis would own 33.8 percent and Banco Santander would own 27.9 percent of ABN AMRO...
The Benefits and Challenges
According to the financial experts, the acquisition of ABN AMRO would benefit the shareholders, customers and employees of the consortium. Customers would benefit from stronger businesses created after the acquisition. They would get access to a wider range of services than before...
Exhibits
Exhibit IA: Royal Bank of Scotland - Consolidated Income Statement (2004-06)
Exhibit IB: Royal Bank of Scotland - Consolidated Balance Sheets (2005-06)
Exhibit IIA: Fortis - Consolidated Income Statements (2004-06)
Exhibit IIB: Fortis - Consolidated Balance Sheets (2005-06)
Exhibit IIIA: Banco Santander - Consolidated Income Statements (2005-06)
Exhibit IIIB: Banco Santander - Consolidated Balance Sheets (2005-06)
Exhibit IVA: ABN AMRO - Consolidated Income Statements (2004-06)
Exhibit IVB: ABN AMRO - Consolidated Balance Sheets (2002-06)
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