ABN Amro, Barclays Talk Merger

European rivals Barclays and ABN Amro are in talks about combining the two banks in what would be the biggest cross-border deals in the European banking history.

The British giant Barclays, and the Dutch, ABN Amro aim to agree a tie-up within 30 days. Shares of both firms jumped on news of the takeover talks.

The banks were inexclusive preliminary discussions on 20 March 2007 - Tuesday. Details of the structure of any deal haven't been released, but Barclays is likely to have to pay more than $80 billion for its rival. The deal will create a $168 billion financial services group at current values.

ABN shares were up 3.2 percent at 30.91 euros, after hitting an all-time high of 31.33, to value it at about 59 billion euros ($78.5 billion) Barclays shares jumped 4.4 percent to 707 pence, valuing it at more than 46 billion pounds ($89.5 billion).

The potential transaction is primarily about growth and not about cost savings. The growth opportunity would come from combining the international and commercial banking businesses, while cost savings would mainly come from investment banking, asset and wealth management arms.

British bank Barclays Plc could jump into the league of top three foreign banks in India from 13 at present if it succeeds in merging its Dutch rival ABN Amro with itself.