The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Barclays’ merger proposal unnerves investors

ABN merger may give global scale, but at what cost to the businesses that have driven the UK bank forward?

Investors in Barclays have been unnerved by its management’s decision to enter merger talks with ABN Amro. True, at first glance it seems reasonable to make a play for the Dutch bank: the valuation of its broad international franchise in prime growth and developed markets has been beaten down by prolonged share price underperformance while it struggled and failed to build a credible top-tier investment bank. The Dutch bank has been tipped into play recently by shareholder activist TCI but has been a clear consolidation target for years. It is cheap and available.

Doubts remain whether this is the deal for Barclays, though. The British bank’s chief executive, John Varley, has famously said that mergers and acquisitions should be the servant of strategy not the master: in other words, banks should decide strategy first and then nail on appropriate deals, not look for the deal first just because it is cheap and doable and then contrive a strategy to justify it.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of acces below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£68.33 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree