Three banks led by Britain's Royal Bank of Scotland clinched victory in the battle for ABN AMRO on Wednesday, declaring their 70 billion euro ($99 billion) offer for the Netherland's biggest bank unconditional.
RBS and its partners, Fortis and Spain's Santander, effectively sealed the biggest ever banking takeover with the statement -- a widely expected step after 86 percent of ABN shareholders tendered shares to the trio last week.
After a bruising, months-long takeover battle, attention will now shift to the carve up and the integration challenge ahead, and to concerns the three lenders may have overpaid, under pressure from rival Barclays.
Barclays withdrew its offer last week after receiving just 0.2 percent of ABN shares.
Right now, did they overpay? Yes, of course they did, analyst Simon Maughan at MF Global said.
In three years' time, if we are coming off the back of two very strong years in capital markets in 2009, 2010, will we still say they overpaid? I don't know. They have a chance -- it is a volatile business and they could be proved to be the winner in the medium term.
Shares in RBS, which will take ABN's businesses most exposed to capital market turbulence, were down 1.3 percent in mid-afternoon trade after the statement, with Fortis up 2 percent and Santander trading virtually flat.
WHAT A CARVE-UP
The three banks, which will have 45 days from the day the deal closes for an in-depth look at ABN's books, now face an unprecedented carve up operation -- something the bank, with its 4,500 branches across 53 countries, had opposed.
ABN's management had initially backed Barclays, as it promised to keep ABN intact, but a fall in its stock hit the value of the UK bank's mostly share offer and forced ABN to switch to a neutral stance between bidders.
RBS, an acquisitive bank that beat integration targets with its 21 billion pound purchase of larger rival NatWest in 2000, faces the biggest task swallowing ABN.
It missed out on getting ABN's prized U.S. bank LaSalle, but will pay almost 16 billion euros for the wholesale and investment banking business and ABN's Asian operations.
Santander gets ABN's Italian and Brazilian operations, while Fortis will get its Dutch business, as well as its wealth and asset management operations.
RBS has long said its victory in the drawn-out NatWest deal showed it could win the day on ABN -- but analysts warned on Wednesday that this time it could have a tougher task.
NatWest included hidden gems like U.S. unit Greenwich Capital, and was also far less efficient than the RBS team had expected, allowing them to pull out more costs. This time, the bank will face the balance between cutting costs and ensuring it keeps businesses that will drive revenue when the cycle turns.
The consortium, which waited for the conclusion of Fortis' 13 billion euro rights issue to close the deal, said payment would take place on Oct 17. Shareholders who have not already accepted the offer have until October 31 to tender their shares.
ABN AMRO said its Chief Executive Rijkman Groenink will step down on the day of an extraordinary general meeting of shareholders (EGM), to be announced at a later date.
(Additional reporting by Dan Lalor)