Barclays to acquire rival ABN Amro

British bank Barclays has agreed to buy Dutch rival ABN Amro for about $91 billion in shares as it attempts to fight off rivals to clinch the world’s biggest bank takeover.

The takeover of Amsterdam-based ABN will create a company with about 217,000 employees, 47 million customers and the second-highest market value among European banks, after HSBC Holdings.

The deal would boost Barclays’ exposure to fast-growing markets in Brazil and Asia and secure a deal for ABN’s management at a one-third premium to its share price before talks began a month ago.

However, there remains a strong threat of a counteroffer from a rival group led by Royal Bank of Scotland.

ABN would sell its Chicago-based bank LaSalle to Bank of America for $21 billion in cash, and the deal with Barclays would be conditional on LaSalle’s sale, the banks said.

ABN Chairman Rijkman Groenink recommended the merger with Barclays as the “best option” for shareholders.

The Royal Bank of Scotland-led consortium, which includes Spain’s Santander and Dutch-Belgian group Fortis, would break up ABN.

The consortium, favored by activist hedge fund TCI, a major ABN investor, had been due to meet Groenink to discuss its plans Monday but postponed, saying it wanted more information on the deal to sell LaSalle.

The deal would create the world’s fifth-biggest bank with a market value of $190 billion and would fulfill Barclays’ ambition to join the top tier of global banks and reduce its reliance on the mature British market.

“The appeal of this transaction is the substantial growth opportunity it presents,” said John Varley, Barclays’ chief executive.

The deal is widely seen as a test case for larger bank mergers in Europe’s consolidating banking and financial sector and part of a wave of mega-bank mergers that began in the United States several years ago.

“If you’re going to compete in the European or international market, you must be bigger,” Varley said.

London-based Barclays plans to slash about 12,800 jobs, or almost 6% of the combined workforce excluding LaSalle, to help reduce costs. The bank would move an additional 10,800 positions to “low-cost locations” such as India.

The Royal Bank of Scotland-led group wants to mull over its options and has ruled out nothing, including making a hostile bid for ABN or pulling out altogether, a person familiar with the matter said.

Reuters and Bloomberg News were used in compiling this report.