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The BBC's Peter Morgan reports
"Eighteen thousand jobs will go"
 real 28k

George Graham, Financial Times
"An opportunity for consolidation too good to miss"
 real 28k

Justin Urquhart Stewart, Barclay's Stockbrokers
"Over the last few years Nat West lost it's way"
 real 28k

Friday, 11 February, 2000, 17:07 GMT
NatWest gives in

natwest logo


NatWest has finally capitulated to Royal Bank of Scotland's £21bn hostile takeover bid.

Battle for Natwest
Its surrender ends months of battling between RBS and its arch-rival, Bank of Scotland, for control of NatWest in a takeover tussle that galvanised the UK banking industry.

NatWest said it accepted that RBS had won support for its bid from the majority of its shareholders and advised investors to accept the offer.

Top UK banks
(market value £bn)
HSBC - £60
Lloyds TSB - £38
RBS-NatWest - £27
Barclays - £23
Chairman Sir David Rowland said: "We congratulate Royal Bank and look forward to helping them ensure the success of the new organisation."

One RBS adviser said: "We are obviously very pleased, although quite frankly it was inevitable. It would have been more graceful of them to have accepted three days ago."

Customers are unlikely to notice much difference initially, with the NatWest name being retained. But there are expected to be large-scale redundancies as operations are combined.

Banking ranking

The joint RBS-NatWest will have 15 million customers and will be the seventh-biggest banking group in Europe - the UK's third-biggest after HSBC and Lloyds TSB.

Top 10 European banks
(market value $bn)
1 HSBC 96.25
2 Lloyds TSB 60.79
3 UBS 54.82
4 Deutsche Bank 50.88
5 ING 50.52
6 Credit Suisse 49.64
7 RBS-NatWest 43.19
8 BSCH 38.18
9 Barclays 36.79
10 BNP Paribas 33.66
As well as some 2,400 branches across the country and 94,000 staff, the new group will include Direct Line insurance and partners such as Tesco, Virgin and Scottish Power.

On Thursday, the chief executive of Bank of Scotland, Peter Burt, had reluctantly admitted defeat.

In a memo to staff, Mr Burt said: "You will have heard that we have lost our bid for Natwest. This saddens us, but we are far from downhearted."

Losing the takeover tussle will be a bitter blow to BoS, whose audacious hostile bid kick-started the banking industry into a long overdue process of consolidation.

Hunter hunted

Left out in the cold by RBS's victory, BoS could now find itself the target of takeover bids from other rivals, such as Lloyds TSB or Barclays.

Royal Bank of Scotland bid
0.968 new RBS shares and £4 in cash
Offer worth £13.70 per NatWest share
Alternative of 0.92 new RBS shares and £4.50 in cash
'Additional value share' worth 70p each
RBS said it expected about 18,000 redundancies from merging operations with NatWest and the finance union, Unifi, has said it fears the consequences of so many job cuts.

The union says it will be pressing immediately for guarantees of no compulsory redundancies.

Although RBS said it had no plans to close branches, a Unifi spokesman said: "We fear that head office jobs could be cut and branches closed, especially where they overlap."

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See also:
11 Feb 00 |  Scotland
'Egg boxes' make way for new bank HQ
11 Feb 00 |  Business
Banking in the doldrums
11 Feb 00 |  Business
NatWest merger's mixed fortunes
07 Feb 00 |  Business
NatWest takeover: a chronology
27 Jan 00 |  Business
NatWest: A history
17 Jan 00 |  Business
Royal Bank of Scotland: A history
27 Jan 00 |  Business
Bank of Scotland: bold move by UK's oldest bank
01 Feb 00 |  Business
NatWest rejects final bid offers
19 Jan 00 |  Business
BoS promises 'major surgery' of NatWest

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