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Sun 7 Oct 2007 11:16 AM

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Barclays withdraws ABN Amro offer

Failed merger could slow British bank's GCC expansion plans, following recent retail launch in UAE.

Barclays Bank on Friday threw in the towel in its battle to merge with Dutch lender ABN Amro, a move that could slow the British bank's expansion plans for the GCC.

In order for the merger to go ahead, Barclays needed to win the approval of 80% of ABN Amro's shareholders, but failed to do so.

John Varley, CEO, Barclays Group, said in a statement: "I thank Barclays shareholders and employees for their overwhelming support for this transaction over the past months. Barclays has strong momentum and I am confident that we will continue to deliver significant growth in the coming years."

Barclays launched retail operations in the UAE in June this year, as well as offshore corporate banking and wealth management services in Qatar.

The bank is expected to have four branches in the UAE by the end of this year, as well as a service centre and its own ATM network. It intends to eventually open in all six of the GCC states.

Frits Seegers, chief executive of Barclays Global retail and commercial banking, said at the time of the bank's UAE retail launch: "Our growth trajectory is going to be very big. When, not if, the merger of ABN Amro takes place, we will accelerate our strategy."

A consortium led by Royal Bank of Scotland (RBS) is now the only bidder for ABN Amro.

It is offering $98.5 billion for ABN Amro, with a larger cash element than the Barclays offer, which was mainly share-based and fell in value when global banking stocks suffered in recent months.

The consortium will find out on October 12 whether ABN Amro shareholders have accepted or rejected its offer.

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