Between 1991 and 2007, ABN AMRO was one of the largest banks in Europe and had operations in about 63 countries around the world. In 2007 the bank was acquired by the consortium, which is splitting up the bank between the three acquiring banks. This process will take till the end of 2009. The American retail assets were sold by ABN AMRO to Bank of America in the months leading up to the acquisition. Fortis announced in September 2008 that it intends to sell its stake in RFS Holdings, which includes all activities that have not been transferred yet to Fortis (i.e. everything except Asset Management). Continuing problems in the Fortis operations in the 2008 financial crisis led to the Dutch state obtaining full control of all Dutch Fortis operations, including Fortis owned parts of ABN-AMRO.
The financial results for the FY 06 added to concerns about the bank's future. Operating expenses increased at a greater rate than operating revenue (reflecting greater operating-results difficulties), and the efficiency ratio deteriorated further to 69.9%. Non-performing loans increased considerably year on year by 192%. Net profits were only boosted by sustained asset sales.
There had been some calls, over the prior couple of years, for ABN AMRO to break up, to merge, or to be acquired. On February 21, 2007, these calls became very concrete, when the TCI hedge fund asked the Chairman of the Supervisory Board to actively investigate a merger, acquisition or breakup of ABN AMRO, stating that the current stock price didn't reflect the true value of the underlying assets. TCI asked the chairman to put their request on the agenda of the annual shareholders' meeting of April 2007.
Events accelerated when, on March 20, 2007, the British bank, Barclays, and ABN AMRO both confirmed they were in exclusive talks about a possible merger. On March 28, 2007, ABN AMRO published the agenda for the shareholders' meeting of 2007. It included all items requested by TCI, but with the recommendation not to follow the request for a breakup of the company.
However, on April 13, 2007, another British bank, the Royal Bank of Scotland (RBS) contacted ABN AMRO to propose a deal in which a consortium of banks, including RBS, Belgium's Fortis, and Spain's Banco Santander Central Hispano (now Banco Santander) would jointly bid for ABN AMRO and, thereafter, break up the different divisions of the company. According to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle, and ABN's wholesale operations; while Banco Santander would take the Brazilian operations; and Fortis, the Dutch operations.
On April 23, 2007, ABN AMRO and Barclays announced the proposed acquisition of ABN AMRO by Barclays. The deal was valued at €67 billion. Part of the deal was the sale of LaSalle Bank to Bank of America for €21 billion.
On April 25, 2007 the RBS-led consortium brought out their indicative offer, worth €72 billion, if ABN AMRO would abandon its sale of LaSalle Bank to Bank of America. During the shareholders' meeting the next day, a majority of about 68% of the shareholders voted in favour of the breakup as requested by TCI.
The sale of LaSalle was seen as obstructive by many: as a way of blocking the RBS bid, which hinged on further access to the US markets, in order to expand on the success of the group's existing American brand, Citizens Bank. On May 3, 2007, the Dutch Investors' Association (Vereniging van Effectenbezitters), with the support of shareholders representing up to 20 percent of ABN's shares, took its case to the Dutch commercial court in Amsterdam, asking for an injunction against the LaSalle sale. The court ruled (on May 3, 2007,) that the sale of LaSalle could not be viewed apart from the current merger talks of Barclays with ABN AMRO, and that the ABN AMRO shareholders should be able to approve other possible merger/acquisition candidates in a general shareholder meeting. However, In July 2007, the Dutch Supreme Court ruled that Bank of America's acquisition of LaSalle Bank Corporation could proceed. Bank of America absorbed LaSalle effective October 1, 2007.
On July 23, 2007, Barclays raised its offer for ABN AMRO to €67.5bn, after securing investments from the governments of China and Singapore, but it was still short of the RBS consortium's offer. The UK bank’s revised bid was worth €35.73 a share — 4.3% more than its previous offer. The offer, which included 37% cash, remained below the €38.40-a-share offer made the week before by Royal Bank of Scotland Group Plc, Banco Santander SA, and Fortis. Their revised offer didn't include an offer for La Salle bank, since ABN AMRO could proceed with the sale of that subsidiary to Bank of America. RBS would now settle for ABN's investment-banking division and its Asian Network.
On July 30, 2007, ABN AMRO withdrew its support for Barclays’ offer, which was lower than the offer from the group led by RBS. While the Barclays offer matched ABN AMRO’s “strategic vision,” the board couldn’t recommend it from “a financial point of view,” the Dutch bank said. The US$98.3bn bid from RBS, Fortis and Banco Santander was 9.8% higher than Barclays’ offer.
On October 5, 2007, Barclays Bank withdrew its bid for ABN AMRO, clearing the way for the RBS-led consortium's bid to go through, along with its planned dismemberment of ABN AMRO. Fortis would get ABN AMRO's Dutch and Belgian operations, Banco Santander would get Banco Real in Brazil, and Banca Antonveneta in Italy and RBS would get ABN AMRO's wholesale division and all other operations, including those in India and the Far East.
On October 9, 2007, The consortium led by Royal Bank of Scotland, bidding for control of ABN AMRO, formally declared victory after shareholders, representing 86 percent of the Dutch bank’s shares, accepted the group’s €70bn (£48bn) offer. This level of acceptances cleared the way for the consortium to take formal control of ABN. The group declared its offer unconditional on October 10, 2007, when Fortis completed its €13bn rights issue. Thus, the financing required for the group’s €38-a-share offer, which included €35.60 in cash, was realised. Rijkman Groenink, Chairman of the Managing Board of ABN AMRO, who heavily backed the Barclays offer, decided that he would step down.
On July 11, 2008, the CEO of Fortis, Jean Votron, stepped down after the ABN AMRO deal had depleted Fortis' capital. The total worth of Fortis, as reflected by its stock value, was at that time a third of what it had been before the acquisition, and just under the value it had paid merely for the Benelux activities of ABN AMRO.
Fortis was likely to sell its stake in the consortium after a government bailout partially nationalised Fortis in September 2008.
However, only one week later, continuing problems in the Fortis operations in the 2008 financial crisis led to the Dutch state obtaining full control of all Dutch Fortis operations (for €16.8bn). This includes Fortis owned parts of ABN-AMRO. Dutch government and the De Nederlandsche Bank president have announced merger of Dutch Fortis and ABN AMRO parts will be achieved while the bank is government owned.
|Sales net of interest||€18.280mn||€18.793mn||€19.793mn||€23.215mn||€27.641mn|
|Net Result Share of the group||€2.267mn||€3.161mn||€4.109mn||€4.443mn||€4.780mn|