ABN Amro - Barclays Merger Cleared By EC

by Ulrika Lomas, for LawAndTax-News.com, Brussels

08 August 2007

The European Commission on Monday cleared the proposed acquisition of the Dutch banking group ABN AMRO by Barclays.

The EC concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Barclays is a global financial service provider active in retail and commercial banking, credit cards, investment banking, wealth management and investment management services. It operates in over 60 countries and, within the EEA, it is predominantly active in the UK.

ABN AMRO is an international banking group active worldwide in four principal customer segments: personal banking, private banking, business and commercial clients and corporate and institutional clients. In the EEA, ABN AMRO is predominantly active in The Netherlands.

Explaining the reasoning behind its decision to approve the merger, the Commission observed that:

"Barclays is currently not active in retail and corporate banking in ABN AMRO's home market (The Netherlands). ABN AMRO's activities in these markets in the UK are marginal. The Commission’s examination showed that there were only limited horizontal overlaps between Barclays and ABN AMRO (especially in corporate banking in the UK) and that, for all the financial services concerned, the combined entity would still face sufficient competition from a number of operators."

In addition to Barclays' offer for ABN AMRO, a consortium formed by Royal Bank of Scotland, Fortis and Santander also announced a bid for ABN AMRO on 29 May 2007.

The EC therefore clarified on Monday that:

"Today's decision is without prejudice to the outcome of these possible competing bids. Clearance of the proposed transaction by the Commission does not imply that the Commission considers that the bid will be successful."

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