Barclays cemented its £95 billion merger with ABN Amro yesterday after the Dutch bank wrongfooted the rival Royal Bank of Scotland consortium by pulling off a spectacular side deal.

Barclays and ABN, announcing the long-awaited terms of their 52/48 agreed merger, stunned the City by revealing that a jewel in ABN’s crown, the Chicago-based LaSalle Bank, had already provisionally been sold for a jaw-dropping $21 billion (£10.5 billion).

The sale of LaSalle to Bank of America enables a combined Barclays/ABN to promise a $12 billion share buyback and puts pressure on RBS, which regards LaSalle as the main prize.

RBS and its consortium partners — Banco Santander, of Spain, and Fortis, of Belgium — responded by cancelling a planned meeting with ABN, saying that they needed to understand the circumstances under which the LaSalle deal could be halted.

The LaSalle deal, which was negotiated in the space of a few days, does not require approval from ABN shareholders. Alternative bidders have only 12 days to top the BoA offer, which is regarded as a knock-out price at 21 times after-tax profits.

Barclays and ABN hailed their agreed merger, which would create the fifth-biggest bank in the world, as one generating significant and sustained additional profits growth for both sets of shareholders.

Barclays is offering 3.225 new shares for each ABN share, valuing each share at €36.25 and ABN as a whole at €67 billion (£45.5 billion). The price is a 33 per cent premium to where ABN shares were trading before the merger talks announcement on March 16.

ABN shares fell by €0.52 to €35.77, partly reflecting the falling Barclays share price and partly on the view that the RBS consortium may walk away.

Rijkman Groenink, the chairman of ABN, said that any rival approach would have to be “serious and compelling” to persuade the bank to open its books. A break fee of €200 million would also be triggered. The combined operation would throw up cost savings and revenue gains of €3.5 billion a year through a widespread cull of Western staff and a shift of back-office work to India and other low-wage jurisdictions. Barclays and ABN announced plans to cut 12,800 jobs and to shift another 10,800 posts from high-wage economies of the West.

The two banks announced that their lead regulator would be the UK’s Financial Services Authority and not the Dutch central bank, as they had originally envisaged. However, the combined bank’s headquarters would be shifted to Amsterdam, even though almost all the most senior jobs will go to Barclays executives.

Some shareholders and analysts were sceptical about Barclays’s ability to achieve the savings envisaged without losing customers and revenues. There may also be a revolt from hedge funds and more activist investors in ABN, which have been campaigning for a full-blooded auction of the bank.

Ten banks will receive a bumper fee bonanza estimated to be in the region of $275 million for advising ABN and Barclays on the deal.

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