1.

The decision on the better takeover candidate for ABN AMRO involves a nuanced evaluation from the
perspectives of both the management of ABN AMRO and its shareholders. Additionally, it's important
to consider the interests of other stakeholders who may be affected by the acquisition.

Perspectives Stakeholders Considerations

Management Barclays: Global Expansion: Barclays' vast international network would open
Perspective doors for ABN AMRO, granting access to new markets, clients, and
product diversification opportunities.
Operational Optimization: Merging operations could lead to significant
cost savings through streamlined processes and increased efficiency.
RFS European Harmony: Composed of prominent European banks, the RFS
Consortium: Consortium aligns well with ABN AMRO's regional focus, potentially
preserving its Dutch identity and regulatory landscape.
Stability and Familiarity: The consortium's European presence offers
familiarity and potentially smoother regulatory hurdles compared to a
non-European acquirer
Shareholder Barclays: Premium Potential: Shareholders might favour Barclays' offer due to the
Perspective: likelihood of a higher premium, translating to immediate value for their
investments.
Enhanced Liquidity: Joining a larger, global entity could increase market
liquidity for ABN AMRO shares, making them easier to buy and sell.
RFS Swifter Approvals: The perceived ease of navigating European
Consortium: regulatory approvals within the consortium could appeal to
shareholders seeking a faster and less uncertain closing.
Strategic Alignment: If shareholders believe the RFS Consortium's
business model and focus better align with ABN AMRO's long-term
vision, they might prefer this option.
Beyond Employees: Assessing potential impact on employee well-being through job security,
Shareholders: career development, and cultural integration is crucial.
Customers: Analyzing changes in service offerings, access to global banking, and overall
customer experience for both potential acquirers is important.
Regulators and Government: Considering the regulatory environment and potential
government concerns, especially regarding cross-border implications, is necessary.

Choosing the ideal takeover candidate for ABN AMRO requires a comprehensive evaluation based on
management and shareholder priorities, while simultaneously considering the wider impact on employees,
customers, and the regulatory landscape. Ultimately, the decision should prioritize ABN AMRO's long-term
strategic goals, maximize shareholder value, and ensure a smooth, well-managed transition that benefits all
stakeholders.
 2. The RFS Consortium's takeover strategy for ABN AMRO is driven by key goals, including achieving €1.8
billion in cost savings through operational streamlining and efficiency improvements. They aim to
capitalize on ABN's client base in debt and risk management for cross-selling opportunities and
expanding their global reach. Fortis, a consortium member, seeks to preserve ABN's Dutch identity and
secure leadership in the merged entity, emphasizing a strategic fit with ABN in commercial banking and
private wealth management. ABN's sensitive segments, such as Capital Markets & Investment Banking,
pose potential risks due to economic volatility.

Each member of the consortium has distinct value drivers. RBS prioritizes cost synergies, revenue growth, and
leadership in specific financial products. Fortis expects to achieve market share gains, synergies in
complementary business lines, and improved risk management capabilities. Santander views value in
accessing ABN's Brazilian operations and expanding into Latin American markets. The overall consortium
strategy aims to balance risks and opportunities across sensitive segments while realizing synergies and
targeted growth in specific business areas.

In the acquisition of ABN AMRO by the banks, a significant portion of the anticipated transaction benefits
stems from cost savings. The estimated cost savings are considered conservative and align with past
achievements. Notably, a substantial proportion of these savings results from the elimination of overlapping
activities, with no reliance on ambitious goals for top quartile cost: income ratios or extensive off-shoring of
functions.

3. The analysis of leverage and other financial ratios follows several considerations. The 2007 acquisition
of ABN AMRO significantly transformed Fortis's financial landscape, with a focal point on its leverage. A
meticulous analysis of the equity multiplier, gauging the extent to which assets are financed by
shareholder equity, is instrumental in understanding this evolution.

Pre-Merger and Post-Merger Trends:2

 Pre-Merger (2007): Fortis demonstrated a relatively moderate equity multiplier of approximately

64.08%, indicative of a substantial reliance on debt to underpin its assets.
 Post-Merger (2013): The aftermath of the merger is discernible in a notable decline of the equity
multiplier to 27.45%. This decline reflects a reduction in leverage primarily attributed to two key
factors:
 Shrinking Total Assets: While total equity exhibited relative stability, total assets experienced a drastic
reduction from 1025.2 billion euros in 2007 to 372.0 billion euros in 2013 (nearly one-third). This
reduction likely resulted from strategic divestments and restructuring endeavors initiated post-merger.
1
Press Release by ABN AMRO - https://www.sec.gov/Archives/edgar/data/1038727/000095010307001215/dp05659_425.htm
2
Bao, Han. (2017). Evaluation of Pre and Post Demerger-Merger Performance: Using ABN AMRO Bank as an Example. International
Journal of Economics and Finance. 9. 196. 10.5539/ijef.v9n2p196.
Investment Risk: A Two-Sided Coin:3

a. Lowering of Leverage: The decrease in leverage implies a slightly mitigated investment risk. A
diminished equity multiplier signifies reduced dependence on debt, rendering Fortis less susceptible to
escalating interest rates and potential economic downturns.
b. High Leverage Remains: Despite the reduction, a 27.45% equity multiplier still indicates Fortis
maintains a noteworthy level of financial leverage. Caution is warranted, and the vulnerability
associated with such leverage should not be entirely discounted.
c. Context Matters: A comprehensive risk assessment necessitates consideration of factors such as
Fortis's profitability, asset quality, and overall financial health. A solitary focus on the equity multiplier
offers an incomplete depiction of the risk landscape.

Further Considerations:
The evaluation of Fortis's post-merger leverage extends beyond the equity multiplier. Factors like the
company's ongoing profitability, the quality of its assets, and its broader financial health should be integral to
any comprehensive analysis. Examining the contextual nuances ensures a nuanced understanding of Fortis's
risk profile in the aftermath of the ABN AMRO acquisition.

Fortis' management team may not have anticipated the potential for its own demise following the acquisition
of ABN AMRO and the subsequent credit crisis. However, in hindsight, examining the high leverage incurred
after the transaction raises questions about whether Fortis could have reasonably foreseen the challenges that
ultimately led to its downfall.

Following the acquisition and amid the credit crisis, Fortis faced a significant increase in leverage, as evidenced
by a decline in the equity multiplier. The reduction in total assets, coupled with the substantial reliance on
debt, created a precarious financial position. While it might be challenging to assert with certainty that Fortis
could have predicted its demise, the notable vulnerabilities associated with high leverage should have
prompted a careful assessment of potential risks.

In retrospect, the unfolding of events, including the credit crisis and the impact of the high leverage on Fortis's
financial stability, suggests that there were warning signs. Examining the circumstances surrounding the
acquisition and the subsequent challenges could offer insights into whether Fortis, with a more cautious
approach and risk mitigation strategies, might have anticipated the potential threats to its sustainability.

4. In my assessment, given the circumstances prevailing at that time, it appears challenging to assert that
Fortis could have executed a better integration of ABN AMRO. The complexities inherent in the
transaction were compounded by the unavoidable credit crisis, a factor beyond Fortis' control. Despite
efforts to mitigate risks, the sheer magnitude of the transaction, combined with the unforeseen
challenges of the credit crisis, presented a formidable challenge.

3
^2
The risks associated with the consortium's decision to pursue ABN AMRO were acknowledged, including the
potential for Fortis to be overwhelmed by the unprecedented bid. Nevertheless, the group successfully
navigated numerous hurdles, collaborating effectively with partners RBS and Santander and obtaining
approvals from financial regulators in Belgium and the European Commission. Although initial objections were
raised by the Dutch authorities, they eventually accepted the operation with a commitment to stringent
monitoring.

The collapse of Fortis occurred months before the planned date for integrating key operations, with only the
asset management business successfully transferred in early 2008. The predictability of such an outcome
remains unclear, as documents referencing the "integration paradox" were noted during the financing plan's
formulation. While it is uncertain whether the CEO and chairman received these documents, the corporate
governance at Fortis functioned effectively, with the risk and capital committee and the audit committee likely
reviewing them. The decision-making participants, experienced in acquisitions, either as actors or advisors,
further contributed to the overall decision-making process.4

Considering alternatives, it seems reasonable to suggest that the capital emission could have been increased,
potentially until its approval by the general assemblies of shareholders in August 2007 or even until the actual
offering in late September of that year. From a management errors perspective, Fortis's decision to limit the
capital emission ahead of the ABN AMRO acquisition is characterized as an organizational error, emphasizing
the importance of hindsight in assessing the challenges and decisions made during this complex integration
process (Reason, 2011).5

The unsuccessful integration of ABN AMRO in 2007 had far-reaching consequences for Fortis, culminating in
their nationalization by the Belgian, Dutch, and Luxembourg governments. This debacle significantly impacted
shareholders, employees, and the broader financial landscape, serving as a stark reminder of the challenges
inherent in large-scale mergers and acquisitions.

The crucial lesson lies in the importance of robust integration planning, thorough risk assessment, and agile
adaptability. While external factors like the 2008 financial crisis played a role, the ability to anticipate and
navigate such contingencies is paramount for successful integration.

In retrospect, Fortis could have explored alternative strategies to the debt-heavy acquisition of ABN AMRO.
Increasing capital issuance to bolster their financial position during the integration process might have
mitigated the severe financial strain that ultimately led to nationalization.

The Fortis-ABN AMRO case stands as a significant case study not only in Fortis's corporate history but also as a
valuable teaching tool for navigating the complexities and inherent risks associated with large-scale financial
mergers. By meticulously planning, rigorously assessing risks, and demonstrating adaptability, organizations
can mitigate the potential for disastrous outcomes and foster successful post-merger synergies.

4
Vincent Giolito, 2015. "Managing organizational errors: Three theoretical lenses on a bank collapse," Working Papers CEB 15-033,
ULB -- Universite Libre de Bruxelles.
5
Reason, J. (1990). Human Error (1st edition). Cambridge England ; New York: Cambridge University Press.