Credit Crisis
In 2007, the RFS consortium (consisting of Royal Bank of Scotland, Fortis and Banco Santander), acquired the Dutch bank ABN AMRO for approximately € 72 billion (or approximately € 39 per share). As part of the deal Fortis bank gained the Private Banking, Asset Management and the ABN AMROs Netherlands Business Unit for which it paid € 24 billion. It had planned to merge these businesses with its own operations in the Netherlands and expected the integration to be completed by late 2009. However the acquisition had depleted Fortis banks reserves and it got into serious trouble in 2008 as the credit crunch took hold.
Prior to the financial problems, the European Union competition commissioner had ruled that for the acquisition to be approved, Fortis would need to sell part of the business it acquired from ABN AMRO. To do this Fortis split the group under the name NEWbank and planned to sell it to Deutsche Bank, however the sale was stopped by the Dutch government at the time of nationalization and the deal was renegotiated.
In September 2008 Fortis announced that its share of ABN AMRO Bank was for sale again. However, no buyer could be found. and therefore on October 4, 2008, the Dutch government announced that it would acquire all the Dutch operations of Fortis, including ABN AMRO for € 16.8 billion. Within this package ABN AMRO was the largest component. The plan was that ABN AMRO and the Dutch part of Fortis would be integrated and eventually sold.
On 1 July 2010 the bank completed the final stage of a complex restructuring, that saw the creation of ABN AMRO Bank N.V.
Read more about this topic: ABN AMRO Group
Famous quotes containing the words credit and/or crisis:
“Truth lives, in fact, for the most part on a credit system. Our thoughts and beliefs ‘pass,’ so long as nothing challenges them, just as bank-notes pass so long as nobody refuses them.”
—William James (1842–1910)
“The amelioration of the world cannot be achieved by sacrifices in moments of crisis; it depends on the efforts made and constantly repeated during the humdrum, uninspiring periods, which separate one crisis from another, and of which normal lives mainly consist.”
—Aldous Huxley (1894–1963)