Deal making in troubled waters: The ABN AMRO takeover
In a letter to ABN AMRO in February 2007, TCI, a British hedge fund with a small stake in ABN AMRO, stated: “We believe that it would be in the interests of all shareholders, other stakeholders and ABN AMRO for the Managing Board of ABN AMRO to actively pursue the potential break up, spin-off, sale or merger of its various businesses (or as a whole)…”. Eight months later, after a head-to-head battle with Barclays, the bank was finally sold to a Royal Bank of Scotland-led consortium, which included Banco Santander of Spain and Fortis, the Belgo-Dutch group. It was the largest financial services transaction ever and the first time that bidders had attempted to break up a large lender. This case looks at the events that led up to the takeover and examines some of the strategic decisions of the recent past which may have triggered the process. It discusses the financing and timing of the deal in the turbulent financial markets of 2007 and raises questions about the future. What were the risks of splitting the bank? Could this complex task be achieved successfully?
This integrative case gives participants an overview of the different aspects of a takeover: finance and control, integrated risk management, strategy. Issues for discussion include strategic lessons for the future of banking in Europe and worldwide; strengths and weaknesses of the two bids regarding valuation, synergies, timing, deal structure, concerns regarding integration planning and implementation.
2007
Cranfield University
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Harvard Business School Publishing
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NUCB Business School
1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]
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Case reference: IMD-7-2639 ©2025
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