ABN finds new suitor
Following NAB's withdrawal from the sale process of ABN Amro, the Commonwealth Bank has stepped into the breach.
Commonwealth Bank has confirmed its interest in entering the investment banking business and has now entered exclusive negotiations with Royal Bank of Scotland over the purchase of the Australian and New Zealand operations of ABN Amro.
CBA appears to be motivated by the same opportunities that attracted NAB – distribution channels for investment products and the opportunity to add to its own considerable institutional banking capabilities.
The purchase of ABN Amro Morgans and ABN Amro Craigs would add to the distribution channels it already holds through its CommSec business, and the advisory and equity capital markets business would fill two areas CBA does not currently cover.
The CBA negotiating team is being co-led by its head of premium business services Stuart Grimshaw - the former New Zealand hockey Olympian who was considered a candidate for CEO before the position was given to fellow Kiwi Ralph Norris.
The other key figure in the negotiations is the head of strategy Ian Nareb, who has a 30-strong team helping on due diligence. CBA is also using its in-house legal team.
Based on recent investment banking trading multiples in the US, CBA could expect to pay a multiple of at least one times book value for ABN Amro. That suggests a figure of around $450 million, a number that NAB was not willing to approach.
CBA appears to be motivated by the same opportunities that attracted NAB – distribution channels for investment products and the opportunity to add to its own considerable institutional banking capabilities.
The purchase of ABN Amro Morgans and ABN Amro Craigs would add to the distribution channels it already holds through its CommSec business, and the advisory and equity capital markets business would fill two areas CBA does not currently cover.
The CBA negotiating team is being co-led by its head of premium business services Stuart Grimshaw - the former New Zealand hockey Olympian who was considered a candidate for CEO before the position was given to fellow Kiwi Ralph Norris.
The other key figure in the negotiations is the head of strategy Ian Nareb, who has a 30-strong team helping on due diligence. CBA is also using its in-house legal team.
Based on recent investment banking trading multiples in the US, CBA could expect to pay a multiple of at least one times book value for ABN Amro. That suggests a figure of around $450 million, a number that NAB was not willing to approach.
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