Barclays has agreed to buy Dutch bank ABN AMRO for around £45.5bn, in what will be the financial services sector’s largest takeover.

The combination of ABN AMRO and Barclays will benefit from a diversified customer base and geographic mix. The proposed merger will create a leading force in global retail and commercial banking, with 47 million customers. 

The company will become a top five card issuer outside the US with approximately 27m cards; a premier global investment bank that is a leader in risk management and financing with an enhanced product offering across a broader geographical footprint; the world’s largest institutional asset manager; and the world’s eighth largest wealth manager.

The holding company of the combined group will be called Barclays PLC. The head office of the combined group will be located in Amsterdam. The proposed merger is expected to complete during the fourth quarter of 2007.

Bank of America Corp has also agreed to acquire LaSalle Bank Corporation from Barclays for $21bn and is expected to complete this acquisition before completion of the ABN AMRO deal. The completion of the sale of LaSalle is a condition of the deal. The combined group will continue to explore opportunities to develop its existing US businesses. 

Rijkman Groenink, ABN AMRO Chairman said: "This proposed merger fits well with our strategic objective to provide significant and sustained value for our shareholders. We believe that merging with Barclays will unite our significant complementary strengths and create long-term value for our shareholders. I am excited about the opportunities this merger brings and look forward to the next phase of ABN AMRO’s future." 

Barclays CEO John Varley said "This proposed merger represents a unique opportunity to create a new competitive force in financial services, which will deliver benefits for our customers and clients and generate sustained growth and additional value for our owners. The proposed merger will significantly enhance stand-alone product development capabilities and distribution. Our combined geographic reach will ensure exposure to both developed and high growth developing economies."