Deals and IPOs

Could Dutch Regulation Scuttle ABN Takeover?


The consortium seeking to buy Dutch bank ABN Amro is concerned that Dutch regulators will impose onerous conditions on its proposed acquisition of ABN, making the proposed deal unattractive, a source close to the consortium said Friday.

The Royal Bank of Scotland together with Spain's Santander and Belgian-Dutch Fortis is attempting to buy ABN for 71 billion euros ($96.33 billion), while Britain's Barclays has offered 61 billion euros to merge with the Netherlands' biggest bank.

"I worry now that the Dutch regulators could impose such conditions to make it unattractive," said the source, who is familiar with the consortium's strategy. "It's gotten very political again."

The consortium members want to split ABN's global operations among themselves, while Barclays -- which is favoured by ABN's management -- will merge with ABN and move the combined bank's headquarters to Amsterdam.

ABN shares fell over 1 percent on Friday on rumours that the consortium might lower its bid for the Dutch bank, but other sources close to the consortium said there was nothing in it. ABN shares closed at 34.23 euros.

Barclays got regulatory approval to buy ABN on Aug. 13, and the consortium expects to hear from Dutch authorities on its bid by mid-September.

The Dutch Finance Ministry is responsible for declaring whether it has any objections to a bank's takeover in the Netherlands and is advised by the Dutch Central Bank (DNB), which is responsible for regulating banks.

Fortis this month dismissed concerns that steep falls in the share price of banks and turbulence around credit markets would make it difficult for it to finance its part of the deal.

The consortium said on Aug. 15 it increased its stake in the Dutch bank to 4.1 percent from 3.25 percent.