RBS led consortium set to bag ABN

The half a year old battle to conquer Netherlands’s financial behemoth ABN AMRO Bank is about to end. At the end of a long bidding war, Royal Bank of Scotland (RBS) led consortium is set to bag ABN AMRO Bank.

The consortium, which also includes Banco Santander SA of Spain and Fortis NV, a Belgian-Dutch bank, plans to split Europe's largest banks into three pieces. The impending takeover will thus not only change the face of European banking, but will have global implications as well.

As a part of the deal, Royal Bank of Scotland would acquire ABN Amro's London-based investment banking division and the Asian network, Santander would get operations in Brazil and Italy while Fortis would acquire ABN's asset management business and operations in the Netherlands. Thus, the Dutch bank’s sprawling operations are set to be carved into pieces.

This €72 billion ($101 billion) hostile acquisition will be the largest banking deal ever.

Makram Azar, head of European consumer, retail and media investment banking at Lehman Brothers said, "It's very complicated, almost impossible to form these consortium's because all the participants' interests rarely align."

Barclays had agreed to buy ABN Amro on April 23, and had to sweeten the bid in July by adding cash after the Royal Bank group made a higher offer. The Royal Bank-led offer contains 93 percent cash, while the Barclays bid includes a cash component of 37 percent and the rest in shares.

Barclay’s stock offer valued ABN Amro shares at 33.27 euros each, 14 percent below the offer of 38 euros a share from the Royal Bank of Scotland led group.

Royal Bank of Scotland group has endured and won a bruising contest that required the intervention of the Dutch Supreme Court. It clearly shows that the group's members were well aligned which helped them surmount big obstacles without falling apart. Now, the ultimate test: The group has to follow through with an open, transparent and speedy integration of the businesses.