Too Big to Swallow? ABN AMRO and the Demise of Fortis Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Too Big to Swallow? ABN AMRO and the Demise of Fortis Case Solution

Answer-1: Comments

RFS Consortium is supposed to turn into a better takeover candidate for ABN AMROT because there are two viable elements of consortium that present a higher bid than Barclays. The primary element is that consortium is a collection of banks that have various resources and exclusive reasons for getting into this merger. They are able to manage to pay for to mix chunks in their resources and location a higher bid in comparison to an unmarried entity that has to arrange all the sources without delay alongside that, exceptional agencies are of various use to the individuals of the consortium consequently; the possibilities of synergy are better for the consortium. Every entity will use the division as a favor to itself with which it relates the most.The second issue because of which is provide of the consortium is performing to be a better bid than Barclays’ is that consortium is paying a larger bite in coins in preference to inventory.

Argue from two different perspectives: the management of ABN AMRO and the shareholders. Are there any other stakeholders to consider?

The handling Board has provided numerous restructuring techniques over the last 6 years which were purported to accelerate earnings boom which would be pondered in a better percentage fee. In 2006 they once more devoted to reduce fees and they have thus far failed to deliver. As shareholders we are also worried that, if the credit surroundings were to worsen, the cutting-edge profitability of ABN AMRO may be notably impacted and further weaken the potential of ABN AMRO to make investments and develop. All of ABN’s essential shareholders agreed the financial institution changed into extraordinarily undervalued, largely because of dangers and disasters undertaken with the aid of preceding control teams.

Answer-2

They scheduled numerous one of a kind conferences with Barclays to discuss what a capability deal would possibly look like. The three banks that fashioned the consortium to gather ABM AMRO said their intentions as follows:

RBS would significantly enlarge its presence in the Americas and gain get admission to a few.7 million new retail clients. The deal could arguably make RBS a top five player in global company banking. Fortis saw the takeover as a chief enhance to its 2005 growth strategy to grow to be one in every of the largest economic establishments in Europe. in line with Fortis’ board, decided on sports inside ABN AMRO Banco Santander become influenced predominately by possibilities in Latin America. Fortis become portrayed within the media because the “junior” partner within the consortium, and often mocked for its loss of firepower, in large part due to the fact its goals regarded to be more “local” than global. But together, the 3 banks had calculated they might be capable of extract €four.4bn in overall annual synergies (before tax), of which the majority were price synergies (€three.5bn)............................

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