Barclays to buy ABN Amro for $91 billion

updated 3:43 p.m. ET April 23, 2007

AMSTERDAM, Netherlands - Barclays PLC said Monday it will acquire ABN Amro NV for $91.16 billion in the largest takeover in financial services, capping a month of negotiations to create a global banking giant and to prevent the splintering of the Netherlands' biggest bank.

As part of the deal, ABN announced it is selling its U.S. unit LaSalle Bank to Bank of America Corp. for $21 billion in cash.

The proposed chief executive of the new group, Barclays CEO John Varley, called the deal "the largest merger ever in global financial industry," and said it holds out the promise of growth at a rate twice as fast as global GDP.

Despite the agreement, ABN said it will go ahead with meetings with representatives from Royal Bank of Scotland PLC, Spain's Banco Santander Central Hispano SA and Belgian-Dutch bank Fortis NV, which invited ABN to enter talks earlier this month.

Those talks would be aimed at splitting up ABN and selling off parts of its operations to each, which could be more lucrative for shareholders.

Under the deal announced Monday, Barclays offered $49.25 for each ABN share, slightly below Friday's closing price of $49.38. Varley said the deal was worth $91.16 billion, a 33 percent premium from ABN's share price when talks began last month.

"The proposed merger of ABN Amro and Barclays will create a strong and competitive combination for its clients with superior products and extensive distribution," the banks said in a statement. "The merged group is expected to generate significant and sustained future incremental earnings growth for shareholders."

For each share, ABN Amro shareholders will be offered 3.225 ordinary shares in the new group, to be called Barclays PLC. The companies said the deal would create a single bank with 47 million customers worldwide. Bank branches were likely to retain their brand names.

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