Page 423 - The Case Lab Book

RBS Consortium Bid

Issue 1

Did RBS pay too much for ABN Amro?

Sir Fred Goodwin’s response on the question whether RBS paid too much for ABN

"Yes, the people who win do pay more than the people who don't win. That is
certainly the case here."

He added:

"The gap between our offer and Barclays was almost exactly the same
as the day we launched the bid all those months ago."

Q: Why does each of the Consortium banks want to own different parts of ABN AMRO?

A: ABN AMRO is an attractive bank with strong customer franchises and great people. There
have, however, been issues with its strategy and the way it is currently organised as a business.
The Consortium banks believe that these are issues which are relatively easy to fix, but require
some degree of reorganisation. RBS, Fortis, and Santander chose to form a Consortium to buy
ABN AMRO because they recognised that there are better owners for the different parts of the
ABN AMRO business than any single owner. The Consortium banks believe that RBS, Fortis
and Santander will create better futures for the businesses and the people who work in them.
Collectively, the three banks believe they will be able to invest more in these businesses than any
single owner could.