Barclays Plc · LSE:BARC
Barclays — Merger or Acquisition (April 2007)
34 slides from Barclays's merger presentation, Apr 24, 2007
Slide 1: Combination of ABN AMRO and Barclays
Combination of ABN AMRO and Barclays 23rd April 2007
Slide 2: Marcus Agius
Marcus Agius Barclays Group Chairman
Slide 3: Rijkman Groenink
Rijkman Groenink ABN AMRO Chairman of Managing Board
Slide 4: John Varley
John Varley Barclays Group Chief Executive
Slide 5: The opportunity
The opportunity • Significant opportunity to accelerate our strategy • Combination creates advantage for customers • Financial metrics attractive for shareholders • Merger combines strengths and values of both businesses
Slide 6: Transaction delivery
Transaction delivery Key terms • 3.225 new Barclays shares per ABN AMRO share • €36.25 per ABN AMRO ordinary share (1) • Ownership 52% Barclays, 48% ABN AMRO • Sale of LaSalle Bank Financial • Synergies: €3.5bn Metrics • EPS Accretion: 5% in 2010 • Rol: 13% in 2010 Corporate • Unitary Board structur
Slide 7: Sale of LaSalle Bank to Bank of America
Sale of LaSalle Bank to Bank of America • LaSalle Bank to be sold for $21 billion • Completion expected prior to combination with Barclays • Est. €12bn excess capital returned to shareholders • Commitment to leading US investment management and investment banking franchises and growing cards busines
Slide 8: Board structure
Board structure BOARD • Arthur Martinez, Chairman • Marcus Agius, Deputy Chairman • 9 Members from ABN AMRO • 10 Members from Barclays
Slide 9: An experienced and clearly defined executive team will deliver the benefits
An experienced and clearly defined executive team will deliver the benefits EXECUTIVE COMMITTEE John Varley, Group Chief Executive Robert E. Diamond, Group President, CEO of IBIM Huibert Boumeester Frits Seegers Chris Lucas Group Chief CEO of GRCB Group Finance Director Administrative Officer Ron Te
Slide 10: Strategic context
Strategic context • The global financial services industry is fragmented • The sources of growth in demand are clear • The successful strategy will align portfolio composition with market growth and customer demand • This alignment will drive benefits for customers, shareholders and employees
Slide 11: Offering world class capabilities to an enlarged, complementary customer base
Offering world class capabilities to an enlarged, complementary customer base World class capabilities • Retail Banking • Credit Cards • Affluent Banking • Commercial Banking • Payments and transactional Banking • Investment Banking • Asset Management • Wealth Management Enhanced product capabilitie
Slide 12: Balanced portfolio with exposure to high growth markets and segments
Balanced portfolio with exposure to high growth markets and segments 24% Developing Markets Developing Markets 24% UK 36% US 6% US 6% Other Europe 17% Netherlands 17% 70% Europe 47% Investment Banking & Investment Management Wealth 5% Asset Mgmt. 9% Retail and Commercial Investment 53% Banking 33% 5
Slide 13: 4th Largest Global Retail and Commercial bank by market share
4th Largest Global Retail and Commercial bank by market share 2.5 share 1.5 market Global 1 % 0.5 Unicredito Barclays BNP ABN Sumitomo RBS Wells JP Barclays Bank of HSBC Citigroup Santander GRCB Paribas AMRO Mitsui FG Fargo Morgan Combined America Presence in 64 countries, serving over 47 million cu
Slide 14: Global Retail and Commercial Banking: significant growth and efficiency opportunities
Global Retail and Commercial Banking: significant growth and efficiency opportunities • Complementary networks • Strong presence in key European markets • Attractive positions in high growth markets • Economies of scale • Enhanced distribution
Slide 15: Investment Banking and Investment Management: markets are large and fragmented
Investment Banking and Investment Management: markets are large and fragmented, significant opportunity for growth Estimated Global Revenue Estimated Share of Pools, $bn, 2006 Top 5 Players, % Barclays Investment banking, 34 66 ~3% revenues % Asset Management, 24 76 ~6% AuM, % Wealth Management, 14
Slide 16: Investment Banking: a premier global player in risk management and financing
Investment Banking: a premier global player in risk management and financing 2006 pro forma Investment Banking Income, €bn 24.9 19.2 16.5 17.2 14.6 15.1 15.3 13.8 6.1 9.2 UBS JPM ML Total DB MS Citi GS (Pre-synergies) Evaluation Criteria: deliver top tier service, attract / retain best talent and co
Slide 17: Investment Banking: Combination will create incremental growth
Investment Banking: Combination will create incremental growth • Accelerates mission to be the premier global investment bank in risk management and financing • Considerably enhances product offering • Adds client relationships in key growth areas • Leverages combined middle-market distribution • Cr
Slide 18: Leading European Wealth Manager
Leading European Wealth Manager • No. 8 globally by assets under management • Leading Barclays position in UK • Leading ABN AMRO position in Netherlands and strong footprints in France, Germany and Belgium • World-class product capabilities to drive revenue growth • Focus on cross-sell with Asset Ma
Slide 19: Investment Management: BGI growth enhanced by ABN AMRO distribution
Investment Management: BGI growth enhanced by ABN AMRO distribution • ABN AMRO extensive distribution network to deliver Barclays world class products and services • Considerable opportunities in Continental Europe • ABN AMRO offers capability in active fundamental investment and retail distribution
Slide 20: What success will look like
What success will look like • Top quartile TSR over time relative to peers • Double-digit growth in EPS and economic profit • Enterprise value growth – developing brand equity – accelerating recruitment of new customers – extending relationships with existing customers – enhancing of reputation as a
Slide 21: Chris Lucas
Chris Lucas Barclays Group Finance Director
Slide 22: Substantial identified synergies
Substantial identified synergies • Total synergies: €3.5bn • Cost synergies: €2.8bn • Net revenue synergies: €0.7bn • Implementation costs: €3.6bn or 129% of cost synergies • Proforma 2006 cost:income ratio (57%) below Barclays (59%) and ABN AMRO (71%)
Slide 23: Expected total synergies by year
Expected total synergies by year €m 2008 2009 2010 Cost 870 2,080 2,800 Net (470)—700 revenue TOTAL 400 2,080 3,500 % 11% 59% 100%
Slide 24: Expected total synergies by business
Expected total synergies by business €m Retail and Investment Investment Corporate Commercial Banking Management Centre Cost 1,650 850 100 200 % 59% 30% 4% 7% Net 150 500 50 -Revenue % 22% 71% 7%
Slide 25: Synergies in Retail and Commercial and Investment Banking
Synergies in Retail and Commercial and Investment Banking Retail and Commercial Operational efficiency 540 IT 530 Global product 280 solutions Management 230 structure Other 70 Costs 1,650 Net Revenues 150 Investment Banking Staff costs 700 Infrastructure 150 Costs 850 Net Revenues 500
Slide 26: Cost synergies can be categorised into sets of actions
Cost synergies can be categorised into 4 sets of actions % of combined Initiative €m 2006 cost base Headcount Rationalisation 1,610 5.0% IT 810 2.5% Project Integration / Discretionary Spend 220 0.7% Property 160 0.5% Total 2,800 8.7%
Slide 27: The transaction drives attractive financial returns
The transaction drives attractive financial returns Premium • 33% to ABN AMRO share price on 16th March 2007 • Total synergies: €3.5bn by 2010 Synergies • Implementation costs: €3.6bn Capital • Target equity Tier 1 ratio of 5.75% • 5%(1) accretive in 2010 for Barclays shareholders Cash EPS • Signifi
Slide 28: Capital management will remain a core focus
Capital management will remain a core focus • Target strong AA rating • Value-based management discipline • Maintain Barclays dividend pay-out policy • Target 5.75% equity/ 7.75% Tier 1 ratio • Buy-backs part of toolkit; benchmark for acquisitions • Est. €12bn return to shareholders post sale of LaS
Slide 29: Indicative timetable
Indicative timetable Today • Announcement of agreement on terms • Offer documentation posted to ABN shareholders July 2007 • Class 1 circular posted to Barclays shareholders August 2007 • Shareholder EGMs Q4 2007 • Completion of LaSalle Bank sale to Bank of America Q4 2007 • Completion of transactio
Slide 30: John Varley
John Varley Barclays Group Chief Executive
Slide 31: Summary
Summary • Significant opportunity to accelerate our strategy • Merger combines strengths and values of both businesses • Combination creates advantage for customers • Financial metrics attractive for shareholders
Slide 32: Disclaimer
BARCLAYS ABN AMRO Disclaimer This document shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qu
Slide 33: Barclays ABN-AMRO
# BARCLAYS » ABN-AMRO
Slide 34: Combination of ABN AMRO and Barclays
Combination of ABN AMRO and Barclays 23rd April 2007