Standing for: "consolidation". This word is very important in the banking sector nowadays, as it has became a more and more global industry. Banks branch internationally and they face stiffer and stiffer competition both in their respective and domestic markets.
The European banks are in an unfortunate situation that they are being exposed to competition of US and Japanese based banks, from the biggest bank in the world - CitiGroup's CitiBank, through other banking giants from these two countries.
The European way to fight back was and still is consolidation - fewer bigger banks have a greater chance of successfully competing with oversea rivals. Companies such as Deutsche Bank, Banco Santander, Royal Bank of Scotland have been pursuing this strategy. If a bank is not strong enough to overtake its competitors, than becoming and attractive acquisition target, and in turn achieving a big payoff for its stockholders becomes essential.
ABN Amro, one of the three biggest banks in the Netherlands is a well capitalized, efficient financial institution operating business units on 5 different continents (For more information see: ABN Amro reports http://www.abnamro.com/com/about/reports.jsp ). There has been some attention in the media about the possibility of ABN acquiring some other European bank. As it turned out however ABN was an acquisition target itself.
The British Barclay's Bank offered 90 billion $ for taking over ABN, but another bid emerged suddenly. Fortis Bank NV, Banco Santander and Royal Bank of Scotland are trying to conduct a hostile take-over of ABN, worth over 100 billion $. The extraordinary thing here is not only the rarity of hostile take over in the banking industry, but the value of the deal making it the biggest in the banking industry history (More on that: http://online.wsj.com/article/SB117748527305881826.html?mod=home_whats_news_us ).
Because of the magnitude of the deal and the power of the involved parties this is turning out to be very interesting. One thing that is pretty certain - ABN stockholders will receive a handsome payoff and one of the parties involved will leave the table empty handed.
***
DJIA does it again!
The Dow has done it again. The Dow Jones Industrial Average has surpassed the 13,000 point mark, achieving a new all time high (See: http://online.wsj.com/article/SB117750071157281919.html?mod=home_whats_news_us ).
The European banks are in an unfortunate situation that they are being exposed to competition of US and Japanese based banks, from the biggest bank in the world - CitiGroup's CitiBank, through other banking giants from these two countries.
The European way to fight back was and still is consolidation - fewer bigger banks have a greater chance of successfully competing with oversea rivals. Companies such as Deutsche Bank, Banco Santander, Royal Bank of Scotland have been pursuing this strategy. If a bank is not strong enough to overtake its competitors, than becoming and attractive acquisition target, and in turn achieving a big payoff for its stockholders becomes essential.
ABN Amro, one of the three biggest banks in the Netherlands is a well capitalized, efficient financial institution operating business units on 5 different continents (For more information see: ABN Amro reports http://www.abnamro.com/com/about/reports.jsp ). There has been some attention in the media about the possibility of ABN acquiring some other European bank. As it turned out however ABN was an acquisition target itself.
The British Barclay's Bank offered 90 billion $ for taking over ABN, but another bid emerged suddenly. Fortis Bank NV, Banco Santander and Royal Bank of Scotland are trying to conduct a hostile take-over of ABN, worth over 100 billion $. The extraordinary thing here is not only the rarity of hostile take over in the banking industry, but the value of the deal making it the biggest in the banking industry history (More on that: http://online.wsj.com/article/SB117748527305881826.html?mod=home_whats_news_us ).
Because of the magnitude of the deal and the power of the involved parties this is turning out to be very interesting. One thing that is pretty certain - ABN stockholders will receive a handsome payoff and one of the parties involved will leave the table empty handed.
***
DJIA does it again!
The Dow has done it again. The Dow Jones Industrial Average has surpassed the 13,000 point mark, achieving a new all time high (See: http://online.wsj.com/article/SB117750071157281919.html?mod=home_whats_news_us ).
More on that in the upcoming posts...
