29th May 2007 07:03
Royal Bank of Scotland Group PLC29 May 2007 29 May 2007- Fortis, RBS and Santander (collectively, the "Banks") OfferSuperior Value for ABN AMRO Shareholders, Significant Benefits for Customers andEmployees • PROPOSED OFFER VALUES ABN AMRO AT €38.40 PER ABN AMRO SHARE• TOTAL VALUE OF €71.1 BILLION, WITH 79% OF CONSIDERATION IN CASH (1) 1. Transaction expected to lead to substantial value creation • ABN AMRO contains good businesses widely spread across a range of attractive markets, but seeks combination with partner • Combined businesses expected to have enhanced market presence and growth prospects with the Banks as partners • Greater and more certain transaction benefits than with a single partner 2. Banks confirm the terms of their proposed Offer • €30.40 in cash plus 0.844 New RBS Shares for each ABN AMRO Share (2) • Valued at €38.40 per ABN AMRO Share, a 13.7% premium to the value of Barclays' proposed offer (3) • Total value of €71.1 billion; €8.6 billion higher than Barclays' proposed offer (4) • Approximately 79% of the consideration in cash, providing greater certainty of value than Barclays' proposed offer • Proposed Offer not subject to any financing condition, with capital raisings fully underwritten • Proposed Offer conditional, inter alia, on result of ABN AMRO shareholder vote on sale of LaSalle • Consideration includes €1.00 in cash to be retained by the Banks pending resolution of the LaSalle Situation 3. Orderly business reorganisation expected to result in strongerbusinesses • Fortis (33.8% of consideration, €24.0 billion) (5): Will create a market leader in Benelux, while capitalising on the ABN AMRO brand, and extend the international growth potential in Fortis' wealth and asset management platforms • RBS (38.3% of consideration, €27.2 billion) (5): Will create a strengthened platform for growth outside the UK, leading corporate and institutional bank globally, leading retail and commercial bank in the US and accelerated opportunities in Asia • Santander (27.9% of consideration, €19.9 billion) (5): Will create a top 3 bank in Brazil and establish retail presence in the Italian market • RBS will lead the reorganisation, with shared assets being managed for value 4. Expected benefits for customers and employees • Customers will gain from enhanced presence, product strengths and distribution capabilities, and increased scale and efficiency • Consortium plan creates sustainable platforms for increased long-term job creation and enhanced opportunities for employees • No plans for significant offshoring of jobs • Fewer employees expected to lose their jobs than with Barclays' proposals 5. Banks expected to generate substantial transaction benefits • Aggregate estimated cost savings of €4.23 billion by the end of 2010 • Aggregate estimated profit enhancements from revenue benefits of €1.22 billion by the end of 2010 • Benefits well balanced across activities and geographic regions 6. Banks' extensive experience and proven track records reduce integrationrisk • Extensive knowledge of markets in which ABN AMRO has major businesses • Strong track records in large scale integration • Projected synergies based on achievable objectives 7. Value and EPS enhancing for the Banks (6) • Fortis: expected to be 4.3% cash EPS enhancing by the end of 2010, expected return on investment on a cash basis of 11.2% in 2010 • RBS: expected to be 7.3% adjusted EPS enhancing by the end of 2010, expected return on investment of 13.5% in 2010 • Santander: expected to be 5.3% EPS enhancing by the end of 2010, expected return on investment of 12.7% in 2010 Superior value for ABN AMRO shareholders Significant benefits for customers and employees (1) Based on undiluted number of shares, as set out in Appendix IV, and on theprice of RBS Shares of 642.5p at the close of business on 25 May 2007 (2) Including €1.00 in cash to be retained by the Banks pending resolution ofthe LaSalle Situation (3) Based on the price of Barclays ordinary shares of 712.5p at the close ofbusiness on 24 April 2007, the day before the Banks first announced details oftheir proposals including a price indication, and on the price of RBS Shares of642.5p at the close of business on 25 May 2007 (4) Based on undiluted number of shares, as set out in Appendix IV, and on theprice of Barclays ordinary shares of 712.5p at the close of business on 24 April2007, the day before the Banks first announced details of their proposalsincluding a price indication, and on the price of RBS Shares of 642.5p at theclose of business on 25 May 2007 (5) Share of consideration including share of consideration for shared assets,as set out in Section 2, and based on undiluted number of shares, as set out inAppendix IV (6) Further details are set out in Section 7 Enquiries FORTIS Jean-Paul Votron, Chief Executive OfficerGilbert Mittler, Chief Financial Officer Press: Wilfried Remans (Brussels) +32 2 565 35 84 (Utrecht) +31 30 226 32 19Investor Relations: Robert ter Weijden (Brussels) +32 2 565 53 78 (Utrecht) +31 30 226 32 20 RBS Sir Fred Goodwin, Group Chief ExecutiveGuy Whittaker, Group Finance Director Press: Andrew McLaughlin +44 131 523 2205Investor Relations: Richard O'Connor +44 207 672 1758 SANTANDER Alfredo Saenz, Chief Executive OfficerJose Antonio Alvarez, Chief Financial Officer Press: Peter Greiff / Angela Roche +34 91 289 5211Investor Relations: Angel Santodomingo +34 91 259 6514 Financial Adviser to the Banks and Underwriter MERRILL LYNCH INTERNATIONAL +44 20 7628 1000 Matthew GreenburghAndrea OrcelHenrietta BaldockRichard Slimmon Contents Overview of the Banks' Proposed Offer for ABN AMRO Appendix I: Other Proposed Offer Details Appendix II: Pre-conditions to the Proposed Offer Appendix III: Proposed Offer Conditions Appendix IV: Sources and Bases Appendix V: Definitions Please also refer to the separate announcements issued by the Banks today. FORTIS, RBS AND SANTANDER PROPOSED OFFER FOR ABN AMRO 1. Transaction expected to lead to substantial value creation ABN AMRO, the Banks believe, contains good businesses and customer franchiseswidely spread across a range of attractive markets. However, ABN AMRO hasacknowledged the opportunity for it to deliver benefits for its customers andemployees and generate growth and additional value for its shareholders bycombining with a partner and selling parts of the ABN AMRO Group. Because of the Banks' comprehensive strategic fit with ABN AMRO across itsactivities, the Banks expect that, following their acquisition of ABN AMRO, theywill be able to create stronger businesses with enhanced market presence andgrowth prospects, leading to substantial value creation and benefits forshareholders, customers and employees. The Banks have the financial and management resources to invest in and grow ABNAMRO's businesses and have proven records of growing their own businesses.Implementation of the Banks' respective measures to realise projected synergiesis expected to enhance profitability and allow the Banks to invest further incustomer-facing areas, as they have done in their own businesses. The Bankstogether expect to deliver benefits for ABN AMRO stakeholders which they believeno single buyer of ABN AMRO could match. The Banks believe that, because of their collective presence in andunderstanding of the broad range of markets in which ABN AMRO operates, andbecause of their proven track records of successful acquisitions and delivery ofpromised results, their acquisition of ABN AMRO will have lower integration riskthan its acquisition by a single buyer. 2. Banks confirm the terms of their proposed Offer The Banks confirm today the terms of their proposed Offer for ABN AMRO. TheBanks are convinced that the proposed Offer provides the best outcome forshareholders, employees and other stakeholders of ABN AMRO and would prefer tosecure a recommendation by the Boards of ABN AMRO. The Banks would therefore still welcome the opportunity of agreeing with ABNAMRO and Bank of America a way forward that meets the interests of shareholders,employees and other stakeholders of all parties. The Banks intend to offer, through their acquisition vehicle RFS Holdings, foreach ABN AMRO Share (subject to the pre-conditions set out in Appendix II): €38.40 per ABN AMRO Share, 13.7% above the value of Barclays' proposed offer (1) Comprising €30.40 in cash plus 0.844 New RBS Shares Of the proposed Offer amount, €1.00 in cash will be deferred pending resolutionof the LaSalle Situation. Further details of this Contingent Consideration areset out in Section 8 below. Approximately 79% of the proposed Offer consideration will be payable in cash. (1) Based on the price of Barclays ordinary shares of 712.5p at the close ofbusiness on 24 April 2007, the day before the Banks first announced details oftheir proposals including a price indication, and on the price of RBS Shares of642.5p at the close of business on 25 May 2007 The pre-conditions to the proposed Offer include that the Dutch Supreme Courtupholds the preliminary ruling of the Dutch Enterprise Chamber that theconsummation of the Bank of America Agreement must be approved by ABN AMROshareholders by the requisite vote at the ABN AMRO EGM. In these circumstances,the proposed Offer will then be conditional upon ABN AMRO shareholders havingfailed to approve the Bank of America Agreement at that meeting. This is furtherdiscussed in Section 8 below. The pre-conditions to the proposed Offer are setout in Appendix II. The Banks' proposed Offer will not be subject to any financing condition or tothe disposal of any businesses by any Bank including the ABN AMRO businessesbeing acquired. On the basis of and subject to the terms and conditions ofagreements entered into with each of the Banks, Merrill Lynch, together withcertain other major international financial institutions, has undertaken tounderwrite the following issues of securities by each of the Banks. Fortis intends to raise €15 billion of new equity financing via a rights issueand up to €5 billion of new Tier 1 capital, and to release up to €8 billion ofcapital. (2) Under the terms of the proposed Offer, RBS would issue New RBSShares with an aggregate value of approximately €15 billion to ABN AMROshareholders. RBS also intends to raise approximately €6 billion of newnon-dilutive Tier 1 capital and to finance the remainder of its share of theconsideration through internal resources. Santander intends to raiseapproximately €9.5-10 billion of new equity financing via a rights issue andmandatorily convertible instruments, amounting to approximately half of itsshare of the consideration, and to finance the remainder through balance sheetoptimisation, including leverage, incremental securitisation and assetdisposals. (2) Including sale of non-core assets, securitisation and other similartransactions Further information about the proposed Offer, including the terms and conditionsto which it is subject, can be found in the Appendices to this announcement. Inparticular, a summary of the financing for the proposed Offer can be found inAppendix I and further information is included in the separate announcementsissued by the Banks today. Further details of the New RBS Shares and thetreatment of ABN AMRO's Convertible Financing Preference Shares, FormerlyConvertible Preference Shares and Options can also be found in Appendix I. 3. Orderly business reorganisation resulting in stronger businesses The Banks have entered into an agreement which relates to the proposed Offer forABN AMRO, their shareholdings in RFS Holdings and the planned reorganisation ofABN AMRO. RBS will lead the Banks' orderly reorganisation of ABN AMRO and assume the leadresponsibility for ensuring that ABN AMRO is managed in compliance with allapplicable regulatory requirements from completion of the proposed Offer. Objective of reorganisation The objective of the orderly reorganisation following completion of the proposedOffer will be to result in the following ownership: • Fortis: Business Unit Netherlands (excluding former Dutch wholesaleclients, Interbank and DMC Consumer Finance), Business Unit Private Clientsglobally, Business Unit Asset Management globally • RBS: Business Unit North America including LaSalle, Business UnitGlobal Clients and wholesale clients in the Netherlands (including former Dutchwholesale clients) and Latin America (excluding Brazil), Business Unit Asia(excluding Saudi Hollandi) and Business Unit Europe (excluding Antonveneta) • Santander: Business Unit Latin America (excluding wholesale clientsoutside Brazil), Antonveneta, Interbank and DMC Consumer Finance • Shared Assets: Head Office and central functions, private equityportfolio, stakes in Capitalia and Saudi Hollandi, and Prime Bank Consideration to be paid and estimated profit The following table sets out the share of the consideration to be provided byeach Bank and the estimated 2006 profit before tax attributable to thebusinesses being acquired. Consideration* Share of Profit before tax** considerationFortis €24.0bn 33.8% €1.68bnRBS €27.2bn 38.3% €1.72bnSantander €19.9bn 27.9% €1.55bnTotal €71.1bn 100.0% €4.95bn* Based on undiluted number of shares, as set out in Appendix IV.** Excludes €0.05 billion of profit before tax relating to central functions and sharedassets. These estimates are based on the 2006 Annual Report & Accounts of ABN AMRO adjustedfor certain restructuring costs and other one-off or non-recurring items and on the estimatesof the Banks. As the reorganisation of the ABN AMRO Group as set out above does notcorrespond precisely to the Business Unit definitions in ABN AMRO's 2006 Annual Report &Accounts, these estimates are not audited and may not be accurate. Any inaccuracies may, inlimited circumstances, following completion of the proposed Offer, be addressed in accordancewith the terms of the arrangements between the Banks, but will not affect the terms of theproposed Offer. Further details on the calculation of these figures are set out in AppendixIV. Management and reorganisation Immediately upon completion of the proposed Offer, ABN AMRO will become asubsidiary undertaking of RBS, owned jointly by the Banks through RFS Holdings.Immediately following completion, the structure and operation of ABN AMRO willremain unchanged. A limited number of senior appointments will be made by theBanks to the Managing Board and the Group Business Committee. The Banks'immediate priority will be to ensure that the organisation continues to providehigh quality service to its customers and to meet all regulatory requirements. During the first 45 days after completion of the proposed Offer, the Banks willwork with the management of ABN AMRO to verify and expand the informationreceived from, and assumptions made on the basis of, the limited due diligenceaccess granted before completion. Within 45 days of completion of the proposedOffer, the Banks intend to have validated a base-lined plan for the achievementof synergies and for the separation and transfer of the ABN AMRO businesses tothe respective Banks. This plan will form the basis for continued consultationwith employee bodies and regulators with whom there have already been extensivediscussions as part of an ongoing process. Implementation of the plan will beginonly when the necessary approvals have been received. The Banks intend that, as an interim step towards the separation of the ABN AMRObusinesses, ABN AMRO will be reorganised into three units containing thebusinesses that will ultimately be transferred to the respective Banks. A fourthunit will contain shared assets regarded as non-strategic. Thereafter, as soon as reasonably practicable, certain businesses which canreadily be separated will be legally transferred to the respective Banks. Fortisand RBS will work together to separate the Netherlands retail and commercialbanking operations from the global wholesale banking operations. The former willbe transferred to Fortis while the latter will be owned by RBS. The separationand transfer of businesses will be subject to regulatory approval andappropriate consultation processes with employees, employee representatives andother stakeholders. IT systems will in general be separated and transferred with the businesses theysupport. However, the Banks will take advantage of opportunities to creategreater economic value by sharing platforms. During the reorganisation, the Banks will retain a shared economic interest inall central functions (including Head Office functions) that provide support toABN AMRO Group businesses. The Banks will also retain shared economic interestsin certain assets and liabilities of ABN AMRO which the Banks regard asnon-strategic. These include ABN AMRO's private equity portfolio, its stakes inCapitalia and Saudi Hollandi, and Prime Bank. These are expected to be disposedof over a period of time with a view to maximising value. The Banks believe that the structure they intend to implement followingcompletion of the proposed Offer will strengthen the ABN AMRO businesses and notexpose them, their capital or their customers to any additional risk. The Banks believe that holders of ABN AMRO's debt securities will, in general,benefit from the expected positive impact of the transaction on ABN AMRO'scredit profile. At the outset, the entire portfolio of ABN AMRO derivative transactions will bemanaged to ensure that all the derivative risk management needs of the componentABN AMRO businesses are satisfied. In time, there will be an orderly migrationof transactions to the appropriate trading entities in line with normal novationor assignment processes. RBS, through its integration of NatWest, hasdemonstrated its ability to successfully manage these processes. Outcome of reorganisation The reorganisation will allow each Bank to enhance the ABN AMRO businesses thatit acquires and achieve significantly strengthened positions in its markets,leading to greater opportunities for growth in those markets. In summary: Fortis: • Creation of a top European financial institution with: - More than 80,000 employees worldwide - Total banking and insurance net profit of more than €5.5 billion(among the top five in the Eurozone) - 2,500 retail branches and 145 business centres across Europe • Unique opportunity to strengthen Benelux core competencies: - Creates a market leader, with more than 10 million customers in theBenelux region alone - Benelux #1 in retail and commercial banking - Superior customer reach and skills in commercial banking, such asleasing and factoring - Capitalising on both ABN AMRO's and Fortis' brands in the Netherlands • Extension of international wealth management growth engine: - 3rd largest European private bank with more than €200 billion AUM - One integrated network and a large European and Asian footprint - A dedicated, broad and differentiated service offering for high networth and ultra high net worth clients • Expansion of asset management growth platform: - Top tier European asset manager with more than €300 billion AUMglobally - Benefiting from a larger geographic footprint and enhanced offeringto third-party distributors - The combined product range expected to reach top quartile positionacross many asset classes and achieve scale in core growth products RBS: • Strengthens RBS's platform for growth outside UK • Accelerates RBS's existing plans for growth in US and Asia • RBS Global Banking & Markets and ABN AMRO Global Wholesale Businesses: - Leading corporate and institutional banking and markets business,with global reach and capability - Well diversified by customer, product and geography - Complementary product strengths and customer franchises - Top 5 across broad range of corporate banking products - Benefits from cash management and trade finance platform - #1 in UK and Europe, #5 in US and Asia (excluding Japan), by clientnumbers • Citizens and LaSalle: - Complementary retail and commercial businesses - Enhanced distribution of Global Banking & Markets products in US - Excellent geographic fit in large and attractive market - RBS America 5th largest banking business in US by assets • RBS and ABN AMRO International Retail Businesses in Asia and MiddleEast: - Enhanced and extended opportunities for growth, particularly incredit cards and affluent banking Santander: • Brazil: - Creates a top 3 bank by network and loans, benefiting from enhancedeconomies of scale - High geographical and product complementarity between both franchises(Banco Real and Santander Banespa) - High degree of value creation through in-market synergies - Low integration risk; Santander Banespa's fully scaleable IT systemis prepared for the migration of Banco Real • Italy: - Antonveneta is a strong franchise in an attractive market - Efficiency improvements from the migration to Partenon, Santander'sproprietary IT system - Potential to improve commercial performance (e.g. mortgage lending,consumer finance, retail mutual funds) - Good platform from which to grow organically • Interbank and DMC (consumer finance in the Netherlands): - Full integration into Santander Consumer Finance, which is alreadypresent in 14 European countries including the Netherlands 4. Expected benefits for customers and employees The Banks expect that the stronger businesses created by combining ABN AMRO'sbusinesses with their own complementary operations will generate benefits forcustomers. The enhanced presence, product strengths and distributioncapabilities of these strengthened businesses are expected to deliver benefitsto customers, who will also gain from the increased scale and efficiency of thebusinesses that serve them. The business reorganisation will be handled in anorderly fashion designed to ensure continuity of customer service. A keyprinciple of the implementation plan agreed among the Banks is that there shouldbe minimal disruption to customer-facing activities. The Banks believe that the stronger businesses resulting from the transactionwill also create sustainable platforms for increased job creation and enhancedopportunities for employees. The Banks' track records in this regard areexcellent, demonstrating organic growth in employment built on strong businessfoundations. The realisation of the expected transaction benefits will entail some initialreduction in staff, not all of which will be in ABN AMRO. The Banks have noplans, however, to increase the number of off-shored jobs significantly. As aresult, the Banks expect that fewer employees will be affected than under theBarclays proposal. The Banks intend to retain the best talent through a fair appointment processbased on merit and competencies. The Banks are committed to continue workingwith works councils, trade unions and other representative bodies to agree themost constructive approach. Existing Social Plans and Collective LabourAgreements will be honoured. The Banks also intend to create significant numbers of new positions in theNetherlands, through investment in a number of significant businesses. Withinthe Netherlands and other appropriate territories, an employment office will becreated to identify redeployment opportunities for staff across the operationsof the Banks. The Banks' firm intention is that any job losses in theNetherlands will be accommodated through natural turnover, redeployment andvoluntary redundancy. 5. Banks expected to generate substantial transaction benefits The Banks believe that the inclusion within their groups of ABN AMRO'sbusinesses will create substantial value for shareholders through cost savingsand revenue benefits. In 2006, ABN AMRO's cost:income ratio was 69.6%, compared to 61.2% for FortisBank, 42.1% for RBS and 48.5% for Santander. The Banks believe that thecombinations of complementary and overlapping businesses will enable substantialde-duplication cost savings. In aggregate, it is expected that cost savings will reach approximately €4.23billion by the end of 2010. The cost savings expected to be achieved by eachBank and the anticipated integration costs are as follows: Cost savings per annum Integration costsFortis €1.15bn €1.54bnRBS €2.01bn €3.84bnSantander €0.86bn €1.00bnShared Assets €0.21bn €0.43bnTotal €4.23bn €6.81bn Whilst the clear cost-saving opportunities underpin the potential valuecreation, the Banks also believe that there are considerable opportunities forthem to create sustainable increases in profitable revenue growth. The Banks believe that limited scale and resources, combined with a lack offocus, have made it difficult for ABN AMRO to take advantage of the many growthopportunities across its broad range of attractive but widely-spread franchises,products and geographies. The combination of complementary businesses andcapabilities will create additional opportunities for growth which are notavailable to ABN AMRO alone, or to any single buyer. The Banks have theresources to capitalise on these opportunities for growth. It is estimated that the aggregate revenue benefits identified by the Banks, netof associated costs and bad debts, before tax, will be approximately €1.22billion by the end of 2010, split as follows: Profit from revenue benefits per annumFortis €0.19bnRBS €0.85bnSantander €0.18bnTotal €1.22bn The details of the anticipated cost savings and revenue benefits as they applyto each of the businesses to be acquired by the Banks are set out in each Bank'sseparate announcement. The figures set out above are preliminary and are based on assumptions the Banksbelieve to be conservative. 6. Banks' extensive experience and proven track records reduce integrationrisk The Banks, collectively, have extensive experience in, and understanding of, ABNAMRO's major businesses and geographies. By concentrating on their respectiveareas of expertise and by dividing the integration tasks among themselves, theBanks expect to reduce significantly overall integration risk relative to asingle buyer with limited experience across ABN AMRO's activities and a limitedtrack record in large scale integrations. Each of the Banks has a strong track record of successful integrations ofacquired businesses, including delivery of promised transaction benefits.Benefits promised and delivered in the Banks' previous largest transactions areset out below: Transaction Total promised Total deliveredFortis Generale Bank €675m €861m (+28%)RBS NatWest £1,420m £2,030m (+43%)Santander Abbey National €300m* €425m (+42%)* Promised by end of second year after completion of the transaction In the acquisition of ABN AMRO by the Banks, the Banks believe their projectedsynergies are based on achievable objectives. Most of the estimated transactionbenefits are expected to result from cost savings which are based onconservative estimates that are in line with past achievements. The Banks expectthat a substantial proportion of the cost savings estimated by the Banks willresult from de-duplication of overlapping activities. They are not dependent onaspirations to achieve top quartile cost:income ratios or on a substantialoff-shoring of functions. 7. Value and EPS enhancing for the Banks Fortis Allowing for the acquisition of the relevant ABN AMRO businesses, Fortis Bank'sTier 1 capital ratio is expected to be close to 6.7% immediately after thetransaction. Based on Fortis' forecasts for business growth and transaction benefits, theacquisition is expected to lead to 4.3% (1) accretion in cash earnings per sharein 2010 and to produce a return on investment on a cash basis of 11.2% (2) in2010. (1) Adjusted for purchased intangibles amortisation (2) Return on investment defined as profit after tax plus post-tax transactionbenefits over consideration plus post-tax integration costs. Adjusted forpurchased intangibles amortisation RBS Allowing for the acquisition of the relevant ABN AMRO businesses, RBS's Tier 1capital ratio is expected to be approximately 7.2% (3) at the end of 2007. Based on RBS's forecasts for business growth and transaction benefits, theacquisition is expected to lead to 7.3% (4) accretion in adjusted earnings pershare in 2010 and to produce a return on investment of 13.5% (5) in 2010. (3) On a pro forma proportional consolidated basis Tier 1 ratio is 7.1% (4) Adjusted for purchased intangibles amortisation and integration costs (5) Return on investment defined as profit after tax plus post-tax transactionbenefits over consideration plus post-tax integration costs. Adjusted forpurchased intangibles amortisation Santander Allowing for the acquisition of the relevant ABN AMRO businesses, Santander'sTier 1 capital ratio is expected to be in excess of 7% at the end of 2007,assuming that there is a full consolidation of acquired businesses by end 2007. Based on Santander's forecasts for business growth and transaction benefits, theacquisition is expected to lead to 5.3% accretion in earnings per share in 2010and to produce a return on investment of 12.7% (6) in 2010. (6) Expected 2010 earnings (including synergies) divided by consideration forABN AMRO businesses plus NPV of amortisation of Antonveneta acquired intangibles 8. LaSalle The pre-conditions to the proposed Offer include that the Dutch Supreme Courtupholds the preliminary ruling of the Dutch Enterprise Chamber to the effectthat the consummation of the Bank of America Agreement must be approved by ABNAMRO shareholders by the requisite vote at the ABN AMRO EGM. In thesecircumstances, the proposed Offer will then be conditional upon ABN AMROshareholders having failed to approve the Bank of America Agreement at thatmeeting. Given that the Banks cannot be sure of the timing of the Dutch Supreme Courtruling or of the ABN AMRO EGM (for example, the ABN AMRO EGM could be heldbefore the Dutch Supreme Court has made its ruling), the ABN AMRO EGM vote isalso a pre-condition to the proposed Offer. The Banks also reserve the right tomake their proposed Offer conditional on the Dutch Supreme Court upholding thepreliminary ruling of the Dutch Enterprise Chamber if the Banks wish to make theproposed Offer and post Offer documentation to ABN AMRO shareholders before theDutch Supreme Court has issued its decision. The pre-conditions and conditions to the proposed Offer are set out inAppendices II and III respectively. The Banks have held amicable discussions with Bank of America. These have notresulted in agreement. The Banks would still welcome the opportunity of agreeingwith ABN AMRO and Bank of America a way forward that meets the interests ofshareholders, employees and other stakeholders of all parties. However, in light of the uncertainty surrounding the LaSalle Situation, paymentof €1.00 of the cash consideration offered in respect of each ABN AMRO Sharewill be deferred (the "Contingent Consideration"). From the Contingent Consideration will be deducted 95% of all costs (includingdamages) incurred by the Banks, ABN AMRO, or any of their respective affiliatesassociated with or resulting from settling, paying damages relating to, orinsuring against, the LaSalle Situation, or otherwise in connection with anyagreement with Bank of America. The Contingent Consideration, less suchdeductions, plus (from completion of the proposed Offer and subject to anyrequired regulatory approval) interest on the balance less deductions, will bepaid following a final and binding settlement of, or a final non-appealablecourt judgement in relation to, the LaSalle Situation, or following theoutstanding issues with Bank of America being resolved. The ContingentConsideration will be paid in cash to ABN AMRO shareholders whose shares areexchanged in the proposed Offer. However, if the total of such deductions isgreater than or equal to the Contingent Consideration, no ContingentConsideration will be paid, and any costs exceeding the Contingent Considerationwill be borne by the Banks. If the LaSalle Situation is still outstanding following completion of theproposed Offer, and depending on the Banks' assessment of the situation at thetime, the Banks reserve the right to continue with the sale of LaSalle to Bankof America on the terms of the Bank of America Agreement. In this unlikelysituation, the Contingent Consideration would not be paid to ABN AMROshareholders. Further details of the Contingent Consideration will be set out in the Offerdocumentation. In light of the protections set out above, the Banks acknowledge that litigationand material adverse change conditions to the proposed Offer cannot be invokedin respect of the LaSalle Situation. If the Dutch Supreme Court, or any final court decision, fails to uphold, orotherwise reach the same conclusion as, the preliminary ruling of the DutchEnterprise Chamber that the consummation of the Bank of America Agreementrequires ABN AMRO shareholder approval or if ABN AMRO shareholders approve theBank of America Agreement at the ABN AMRO EGM, the Banks' proposed Offer willnot proceed (unless these conditions or pre-conditions are waived). However, theBanks reserve the right to make a new offer for ABN AMRO (excluding LaSalle) inthese circumstances. Notwithstanding the foregoing, no decision has been made inthis regard and there can be no certainty that any new offer would be made atall or, if made, there can be no certainty as to the financial and other termsand conditions of such offer. 9. Regulatory process RBS will take the lead responsibility for ensuring that ABN AMRO is managed incompliance with applicable regulatory requirements. Fortis and Santander willsupport RBS with relevant specialist expertise whenever appropriate. The stability of the financial system is of paramount concern to each of theBanks and they have the utmost confidence that the system will be strengthenedas a result of the proposed transaction. On completion of the proposed Offer, ABN AMRO will initially remain structurallyunchanged. A limited number of senior appointments are to be made as soon aspracticable by the Banks to the Managing Board and the Group Business Committee. During the first 45 days after completion of the proposed Offer, the Banks willwork with the management of ABN AMRO to verify and expand the informationreceived from and assumptions made on the basis of the limited due diligenceaccess granted before completion. Within 45 days of completion of the proposedOffer, the Banks intend to have validated a base-lined plan for the achievementof synergies and for the separation and transfer of the ABN AMRO businesses tothe respective Banks. This plan will form the basis for consultation withemployee bodies and regulators. Implementation of the plan will begin only whenthe necessary approvals have been received. The Banks firmly believe that they can satisfy the requirements of theregulators, as they have been able to do in all of their previous acquisitions. DNB, the FSA, the BFIC, the Bank of Spain, the AFM, Euronext Amsterdam and theSocial-Economic Council (Sociaal-Economische Raad) have been informed of theBanks' proposals. The Banks will seek to obtain all necessary regulatory and competition approvalsand clearances and will undertake all requisite employee consultation andinformation processes as soon as practicable. Accordingly, clearance for theproposed Offer will be sought from the Dutch Ministry of Finance and relevantcentral banks. The Banks have discussed the proposed transaction with regulatory authorities intheir respective home markets including Belgium, the Netherlands, Spain and theUK. In addition, the Banks have identified change of control notifications orapprovals in a number of jurisdictions. 10. Process and next steps Offer documentation to ABN AMRO shareholders will be published as soon aspracticable following the satisfaction or waiver of the pre-conditions to theproposed Offer set out in Appendix II. When made, completion of the proposed Offer will be subject to the satisfactionor waiver of certain proposed Offer conditions customary for transactions ofthis type and certain other proposed Offer conditions including those summarisedin Appendix III. If the proposed Offer is declared unconditional and completed, depending on thenumber of ABN AMRO Shares tendered and purchased in the proposed Offer, theBanks intend to acquire the ABN AMRO Shares they do not own after completion ofthe proposed Offer, either by initiating the squeeze-out procedures permitted byapplicable law, effecting a legal merger or in any other manner permitted bylaw. In addition, it is intended that ABN AMRO's listings of ordinary shares andFormerly Convertible Preference Shares on Eurolist by Euronext Amsterdam N.V.,and of the ABN AMRO ADSs on the NYSE, will be terminated. Finally, provided therelevant conditions are satisfied, the Banks will procure that ABN AMROderegisters and terminates its reporting and other obligations under the USSecurities Exchange Act of 1934, as amended. Next Steps It is currently expected that amongst others the following will be achievedduring July / August of 2007 (reviewing authority in brackets): • Publication and filing of the Offer document (including AFM and SEC) • Filing of the US registration statement for the issuance of the New RBSShares pursuant to the Offer (SEC) • Publication of the prospectus by RBS for the issue of New RBS Shares(FSA) • Publication of prospectuses by Fortis and Santander in connection withtheir respective planned equity issuances (CBFA, AFM and Banco de Espana,respectively) • Publication of shareholder circulars by RBS and Fortis in connectionwith shareholder approval of the transaction and for Fortis also to approve theequity issue (FSA, CBFA and AFM, respectively) • Equity fundraisings by Fortis and Santander It is currently expected that Extraordinary General Meetings of shareholders ofthe Banks in connection with the transaction will be held in July / August of2007. In addition there will be one or more Extraordinary General Meetings ofABN AMRO shareholders in connection with the transaction. The Banks are working towards and currently expect commencement of the Offer onor before 13 August 2007, subject to satisfaction of the pre-conditions to theproposed Offer. (1) It is currently expected that completion of the Offer willbe achieved in the fourth quarter of 2007. (1) Consequently, an extension of the 6 weeks period referred to in article 9g(3) of the Decree, which would otherwise end on 10 July 2007, is required. TheAFM has agreed to grant the Banks such an extension. The period of the extensionshall be set by the AFM after consultation with the Banks in the week of 2 July2007 taking into account the relevant circumstances then prevailing in respectof the proposed Offer including the progress made with the approval processes ofthe Offer documentation (as specified above). The extension granted will bedisclosed by the Banks in an announcement on the date of the extension in theweek of 2 July 2007. The Banks will make a further statement in or before the week of 2 July 2007providing a further timetable for the proposed Offer. The order and timing of the events above are illustrative only and may besubject to change. Investor and Analyst Information PRESENTATION TO ANALYSTS AND INVESTORS A meeting for analysts and institutional investors will be hosted by Jean-PaulVotron, Fortis Chief Executive, Sir Fred Goodwin, RBS Group Chief Executive andAlfredo Saenz, Santander Chief Executive. • Venue: 280 Bishopsgate, London, EC2M 4RB • Date & Time: 29 May 2007 8.30am - 10.15am (BST) (9.30am - 11.15am(CET)) for a prompt start. Registration will commence at 8.00am Please note, as seating is limited, it may be necessary to restrict the numberof attendees from each institution. • Slide presentation packs will be available on the Banks' websitesshortly If you are unable to attend the meeting in person, you can listen through any ofthe following options: • A live webcast of the event available on: - www.emincote.com/consortium001/default.asp - Details will also be available on the Banks' websites • www.rbs.com • www.fortis.com • www.santander.com • A live conference call by dialling: - UK Toll: +44 207 138 0811 - UK Toll free: 0800 028 7847 - US Toll: +1 718 354 1193 - US Toll free: 1888 893 9532 - Spain Toll: +34 914 533 434 - Spain Toll free: 800 099 465 - Netherlands Toll: +31 20 713 2789 - Netherlands Toll free: 0800 026 0068 • There will be a replay facility on the investor presentation. This canbe accessed by dialling: - UK Toll: +44 207 806 1970 - UK Toll free: 0800 559 3271 - US Toll: +1 718 354 1112 - US Toll free: 1 866 883 4489 - Spain Toll: +34 917 889 869 - Netherlands Toll: +31 20 713 2791 - Netherlands Toll free: 0800 027 0028 - Passcode for replay: • English: 4945328# • Spanish: 3089460# The webcast provides an opportunity to listen remotely to the live presentation.You may join in the Q&A presentation by using the live conference call. Press Information PRESS CONFERENCE The Banks will hold a press conference for members of the media in London. The press conference will be hosted by Jean-Paul Votron, Fortis Chief Executive,Sir Fred Goodwin, RBS Group Chief Executive and Alfredo Saenz, Santander ChiefExecutive. The details of the press conference are as follows: • London Venue: 280 Bishopsgate, London, EC2M 4RB • Date & Time: 29 May 2007 2.00pm - 3.00pm (BST) (3.00pm - 4.00pm (CET)) If you are unable to attend the meeting in person, you can listen through any ofthe following options: • A live webcast of the event available on: - www.emincote.com/consortium001/default.asp - Details will also be available on the Banks' websites • www.rbs.com • www.fortis.com • www.santander.com • A live conference call by dialling: - UK Toll: +44 207 138 0811 - UK Toll free: 0800 028 7847 - US Toll: +1 718 354 1193 - US Toll free: 1888 893 9532 - Spain Toll: +34 914 533 434 - Spain Toll free: 800 099 465 - Netherlands Toll: +31 20 713 2789 - Netherlands Toll free: 0800 026 0068 • A live video conference for journalists in Madrid. - Please call +34 289 5221 for information • There will be a replay facility on the media call. This can be accessedby dialling: - UK Toll: +44 207 806 1970 - UK Toll free: 0800 559 3271 - US Toll: +1 718 354 1112 - US Toll free: 1 866 883 4489 - Spain Toll: +34 917 889 869 - Netherlands Toll: +31 20 713 2791 - Netherlands Toll free: 0800 027 0028 - Passcode for replay: • English: 4270111# • Spanish: 9849777# • The webcast provides an opportunity to listen remotely to the livepresentation. You may join in the Q&A presentation by using the live conferencecall. • Broadcast media who wish to access live transmission for the pressconference should contact the respective press offices or [email protected] for details. • Time constraints in the schedule will restrict the availability of thePrincipals for broadcast interviews. Broadcast media who wish to request aninterview should contact the respective press offices or [email protected]. Satellite links and ISDN lines are available forbroadcast interviews. • For logistical reasons, no camera teams or photographers will beallowed in the conference rooms. Important Information This announcement is an announcement as defined in article 9g(1) a in fine ofthe Decree. In connection with the proposed Offer, RBS expects to file with theSEC a Registration Statement on Form F-4, which will constitute a prospectus,and the Banks expect to file with the SEC a Tender Offer Statement on ScheduleTO and other relevant materials. INVESTORS ARE URGED TO READ ANY DOCUMENTSREGARDING THE PROPOSED OFFER IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEYWILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain a copy ofsuch documents, without charge, at the SEC's website (http://www.sec.gov) oncesuch documents are filed with the SEC. Copies of such documents may also beobtained from each Bank, without charge, once they are filed with the SEC. This communication shall not constitute an offer to sell or the solicitation ofan offer to buy any securities, nor shall there be any sale of securities in anyjurisdiction in which such offer, solicitation or sale would be unlawful priorto registration or qualification under the securities laws of any suchjurisdiction. This press release is not an offer of securities for sale into theUnited States. No offering of securities shall be made in the United Statesexcept pursuant to registration under the US Securities Act of 1933, as amended,or an exemption therefrom. Forward-Looking Statements This announcement includes certain "forward-looking statements". Thesestatements are based on the current expectations of the Banks and are naturallysubject to uncertainty and changes in certain circumstances. Forward-lookingstatements include any statements related to the benefits or synergies resultingfrom a transaction with ABN AMRO and, without limitation, statements typicallycontaining words such as "intends", "expects", "anticipates", "targets","plans", "estimates" and words of similar import. By their nature,forward-looking statements involve risk and uncertainty because they relate toevents and depend on circumstances that will occur in the future. There are anumber of factors that could cause actual results and developments to differmaterially from those expressed or implied by such forward-looking statements.These factors include, but are not limited to, the presence of a competitiveoffer for ABN AMRO, satisfaction of any pre-conditions or conditions to theproposed Offer, including the receipt of required regulatory and anti-trustapprovals, the successful completion of the Offer or any subsequent compulsoryacquisition procedure, the anticipated benefits of the proposed Offer (includinganticipated synergies) not being realized, the separation and integration of ABNAMRO and its assets among the Banks and the integration of such businesses andassets by the Banks being materially delayed or more costly or difficult thanexpected, as well as additional factors, such as changes in economic conditions,changes in the regulatory environment, fluctuations in interest and exchangerates, the outcome of litigation and government actions. Other unknown orunpredictable factors could cause actual results to differ materially from thosein the forward-looking statements. None of the Banks undertake any obligation toupdate publicly or revise forward-looking statements, whether as a result of newinformation, future events or otherwise, except to the extent legally required. Other Information Merrill Lynch International, which is authorised and regulated in the UnitedKingdom by the FSA, is acting as financial adviser to Fortis, RBS and Santanderand as underwriter for Fortis, RBS and Santander, and is acting for no one elsein connection with the proposed Offer, and will not be responsible to anyoneother than Fortis, RBS and Santander for providing the protections afforded tocustomers of Merrill Lynch International nor for providing advice to any otherperson in relation to the proposed Offer. Fortis Bank SA/NV, which is authorised and regulated in Belgium by the CBFA,Greenhill & Co. International LLP, which is authorised and regulated in theUnited Kingdom by the FSA, and Fox-Pitt, Kelton Ltd, which is authorised andregulated in the United Kingdom by the FSA, are acting as financial advisers toFortis. Fortis Bank SA/NV, Greenhill & Co. International LLP and Fox-Pitt,Kelton Ltd are acting for no one else in connection with the proposed Offer, andwill not be responsible to anyone other than Fortis for providing theprotections afforded to their respective customers nor for providing advice toany other person in relation to the proposed Offer. Fortis Bank SA/NV andGreenhill & Co. International LLP are acting as financial adviser in connectionwith the transaction and Fox-Pitt, Kelton Ltd is acting as financial adviser inconnection with the financing of the transaction. The Royal Bank of Scotland plc, which is authorised and regulated in the UnitedKingdom by the FSA, is acting as financial adviser to RBS and is acting for noone else in connection with the proposed Offer, and will not be responsible toanyone other than RBS for providing the protections afforded to customers of TheRoyal Bank of Scotland plc nor for providing advice to any other person inrelation to the proposed Offer. Santander Investment, S.A., which is authorised and regulated in Spain by theBanco de Espana and the Comision Nacional del Mercado de Valores, is acting asfinancial adviser to Santander and is acting for no one else in connection withthe proposed Offer, and will not be responsible to anyone other than Santanderfor providing the protections afforded to customers of Santander Investment,S.A. nor for providing advice to any other person in relation to the proposedOffer. NIBC Bank N.V., which is authorised and regulated in the Netherlands by the AFMand DNB, is acting as financial adviser to Santander and is acting for no oneelse in connection with the proposed Offer, and will not be responsible toanyone other than Santander for providing the protections afforded to customersof NIBC Bank N.V. nor for providing advice to any other person in relation tothe proposed Offer. Any Offer made in or into the United States will only be made by the Banks and/or RFS Holdings directly or by a dealer-manager that is registered with the SEC. APPENDIX I OTHER PROPOSED OFFER DETAILS Further information on the terms of the proposed Offer ABN AMRO shareholders are expected to be entitled to receive and retain the ABNAMRO interim dividend in respect of 2007 (expected to be paid on 27 August2007). The terms of the proposed Offer exclude the ABN AMRO 2007 interim dividend whichhas been assumed to be €0.55 per ABN AMRO Share. If the actual ABN AMRO 2007interim dividend differs from this assumption, the Banks reserve the right, attheir discretion, to make an appropriate adjustment to the terms of the proposedOffer. The Offer consideration will be reduced to reflect the gross effect ofany dividends (other than the ABN AMRO 2007 interim dividend up to €0.55),distributions (including, inter alia, shareholders' meetings attendancepremiums), share splits, share dividends or analogous transactions effectivefrom the date hereof until the date on which tendered ABN AMRO Shares areaccepted for exchange (both dates included). Financing of the proposed Offer Under the terms of the proposed Offer, RBS intends to issue New RBS Shares toABN AMRO shareholders and holders of ABN AMRO ADSs and to provide a portion ofthe cash consideration. Fortis and Santander intend to issue equity to raisecash which will be used, together with cash from other sources, to satisfy theirrespective portions of the consideration payable to ABN AMRO shareholders andholders of ABN AMRO ADSs under the terms of the proposed Offer. All three banksintend to issue Tier 1 capital instruments to raise cash. The Banks' proposed Offer will not be subject to any financing condition or tothe disposal of any businesses by any Bank including the ABN AMRO businessesbeing acquired. On the basis of and subject to the terms and conditions ofagreements entered into with each of the Banks, Merrill Lynch, together withcertain other major international financial institutions, has undertaken tounderwrite the following issues of securities by each of the Banks. Fortis intends to raise €15 billion of new equity financing via a rights issueand up to €5 billion of new Tier 1 capital, and to release up to €8 billion ofcapital. Under the terms of the proposed Offer, RBS would issue New RBS Shareswith an aggregate value of approximately €15 billion to ABN AMRO shareholders.RBS also intends to raise approximately €6 billion of new non-dilutive Tier 1capital and to finance the remainder of its share of the consideration throughinternal resources. Santander intends to raise approximately €9.5-10 billion ofnew equity financing via a rights issue and mandatorily convertible instruments,amounting to approximately half of its share of the consideration, and tofinance the remainder through balance sheet optimisation, including leverage,incremental securitisation and asset disposals. New RBS Shares Application will be made to the FSA for the New RBS Shares to be admitted to theOfficial List and to the LSE for such shares to be admitted to trading on theLSE's main market for listed securities. It is expected that trading on the LSE will become effective and dealings, fornormal settlement, will begin shortly following the date on which it isannounced that all conditions to the proposed Offer have been satisfied orwaived. The offer and sale of the New RBS Shares will be registered with the SEC. It isexpected that an application will be made to list the New RBS Shares, in theform of ADSs, on the NYSE. RBS Shares are only listed on the Official List. However, certain preferenceshares of RBS are traded in the United States through a NYSE-listed ADRprogramme, with The Bank of New York as the depositary and paying agent. Further details on settlement, listing and dealing will be included in the Offerdocumentation. The New RBS Shares will be issued credited as fully paid and willrank pari passu in all respects with existing RBS ordinary shares and will beentitled to all dividends and other distributions declared or paid by RBS byreference to a record date on or after completion of the proposed Offer but nototherwise. RBS intends to pay dividends semi-annually. It is expected that therecord date for the interim dividend declared by RBS in respect of 2007 will bebefore completion of the proposed Offer. Further details of the rights attaching to the New RBS Shares and a descriptionof any material differences between the rights attaching to those shares and theABN AMRO Shares will be set out in the Offer documentation. Convertible preference shares The Banks intend to make a proposal for all the depositary receipts representingthe issued and outstanding Convertible Financing Preference Shares consistentwith the terms of the prospectus dated August 31, 2004 relating to theConvertible Financing Preference Shares. A cash offer will be made for the issued and outstanding Formerly ConvertiblePreference Shares of €26.50, the closing price on 25 May 2007. The aggregateconsideration payable for the Formerly Convertible Preference Shares will be inthe region of €1.2 million. Options If permissible under the applicable plans, holders of Options will be offeredthe ability to exercise their Options and accept the proposed Offer. RFS Holdings It is intended that the proposed Offer will be made through RFS Holdings, acompany owned by the Banks and organised and existing under Dutch law. Each ofthe Banks will have representation on the board of RFS Holdings. Under the termsof the consortium agreement entered into by the Banks, RFS Holdings will befunded by the Banks to settle the cash portion of the consideration and willprocure the issue to ABN AMRO shareholders by RBS of the New RBS Shares. Option for shareholders to convert New RBS Shares into ADSs Holders of ABN AMRO ADSs will be offered €30.40 cash plus 0.844 New RBS Sharesper ABN AMRO ADS under the terms of the proposed Offer, including €1.00 in cashto be retained by the Banks pending resolution of the LaSalle Situation. RBSintends to facilitate a custodial arrangement prior to completion of thetransaction which will allow former US holders of ABN AMRO Ordinary Shares andformer holders of ABN AMRO ADSs to hold and trade the New RBS Shares issued tosuch holders. Under this arrangement, such shareholders will be able to elect toconvert their dividends into US dollars. Prior to completion of the proposed Offer, RBS expects to establish an ADSprogramme in the United States. US holders of ABN AMRO Ordinary Shares orholders of ABN AMRO ADSs who receive New RBS Shares under the proposed Offer areexpected to be able to deposit such New RBS Shares in exchange for new RBS ADSson completing the necessary formalities. It is expected that an application willbe made to list the new RBS ADSs on the NYSE. Persons who elect to exchange their New RBS Shares for RBS ADSs will be requiredto pay stamp duty reserve tax and any other taxes or other costs associated withthe exchange of New RBS Shares for RBS ADSs. Euronext listing In addition, RBS intends to list the New RBS Shares on Eurolist by EuronextAmsterdam N.V. If practicable, RBS will apply for such listing prior to thecompletion of the proposed Offer. APPENDIX II PRE-CONDITIONS TO THE PROPOSED OFFER • The preliminary ruling of the Dutch Enterprise Chamber that theconsummation of the Bank of America Agreement should be subject to ABN AMROshareholder approval has been upheld or otherwise remains in force, whether ornot pursuant to any decision of the Dutch Supreme Court, or of any otherjudicial body, and ABN AMRO shareholders have failed to approve the Bank ofAmerica Agreement by the requisite vote at the ABN AMRO EGM. • There has been no material adverse change in respect of ABN AMRO,Fortis, RBS or Santander (excluding any material adverse change resulting fromthe LaSalle Situation). • All necessary notifications, filings, submissions and applicationsrequired to make the proposed Offer have been made and all authorisations andrelief required to make the proposed Offer have been obtained. • All requisite employee consultations and information procedures withtrade unions and other employee representative bodies of Fortis and, insofar asapplicable, ABN AMRO have been completed. The pre-conditions to the proposed Offer are for the benefit of the Banks and,to the extent permitted, may be waived by the Banks (either in whole or in part)at any time prior to the commencement of the proposed Offer. Notice of any suchwaiver shall be given in the manner prescribed by applicable law. APPENDIX III PROPOSED OFFER CONDITIONS • ABN AMRO shareholders have failed to approve the Bank of AmericaAgreement by the requisite vote at the ABN AMRO EGM convened for that purpose. • At least 80% of the issued and outstanding ordinary shares of ABN AMROon a fully diluted basis have been tendered into the proposed Offer and notwithdrawn or are otherwise held by the Banks. • There has been no material adverse change in respect of ABN AMRO,Fortis, RBS or Santander (excluding any material adverse change resulting fromthe LaSalle Situation). • Other than the LaSalle Situation, no litigation or other legal,governmental or regulatory proceedings or investigations by a third party(including any regulatory body or governmental authority) have been institutedor threatened or are continuing and no judgement, settlement, decree or otheragreement relating to litigation or other legal, governmental or regulatoryproceedings or investigations instituted by a third party (including anyregulatory body or governmental authority) shall be in effect which might,individually or in aggregate, reasonably be expected to materially and adverselyaffect ABN AMRO, RFS Holdings or any Bank or any of their respective affiliates. • All necessary notifications, filings, submissions and applications inconnection with the proposed Offer have been made and all authorisations andconsents in connection with the proposed Offer have been obtained in a formsatisfactory to the Banks and all relevant waiting periods have expired and allmandatory or appropriate regulatory and competition approvals, insofar asrequired for settlement of the proposed Offer, of domestic and internationalregulatory authorities have been obtained in a form satisfactory to the Banks. • The registration statement on Form F-4 and any registration statementon Form F-6 filed with the SEC in conjunction with the proposed Offer forregistration of the securities being offered under the proposed Offer has becomeeffective, no stop order has been issued or proceedings for suspension of itseffectiveness initiated by the SEC. • No notification has been received by any of the Banks from theirrespective home regulators that there is likely to be a material and adversechange in the supervisory, reporting or regulatory capital arrangements thatwill apply to ABN AMRO or any of the Banks. • Confirmation has been obtained that the New RBS Shares will be admittedto the Official List and admitted to trading on the LSE's main market for listedsecurities. • The general meetings of shareholders of the Banks have passed allagreed or required resolutions. • Other than entry into of the Purchase and Sale Agreement dated as ofApril 22, 2007 between Bank of America and ABN AMRO Bank N.V. in respect of ABNAMRO North America Holding Company, the holding company for LaSalle BankCorporation including the subsidiaries LaSalle Bank N.A. and LaSalle BankMidwest N.A., no member of the ABN AMRO Group has entered into, or completed anytransaction, involving the sale, repurchase, redemption or issue by ABN AMRO orits affiliates to third parties of any shares in its own share capital (orsecurities convertible or exchangeable into shares or options to subscribe forany of the foregoing), or involving the sale of a material part of its businessor assets, and no member of the ABN AMRO Group has entered into, varied orterminated any material contract outside the ordinary course of business orgiven any undertaking to do any of the foregoing. ABN AMRO has also not approvedor declared any dividend nor has ABN AMRO made any payment of such dividend,except in the normal course of business and consistent with past practice. • All requisite employee consultations and information procedures withtrade unions and other employee representative bodies of Fortis and, insofar asapplicable, ABN AMRO have been completed. The conditions to the proposed Offer are for the benefit of the Banks and, tothe extent permitted, may be waived by the Banks (either in whole or in part) atany time prior to the expiration of the proposed Offer. Notice of any suchwaiver shall be given in the manner prescribed by applicable law. In order to enable the Banks to make the proposed Offer and post Offerdocumentation before the Dutch Supreme Court, or any other relevant judicialbody, as the case may be, has issued its decision, the Banks reserve the rightto make their proposed Offer conditional on the preliminary ruling of the DutchEnterprise Chamber being upheld or otherwise remaining in force, or on a finalcourt decision having been taken that it is a legal requirement that the Bank ofAmerica Agreement must be approved by ABN AMRO shareholders by the requisitevote at the ABN AMRO EGM. APPENDIX IV SOURCES AND BASES Save as otherwise stated, the following constitute the sources and bases ofcertain information referred to in this announcement: 1. The values placed on the entire issued ordinary share capital of ABNAMRO by the Banks' proposed Offer and Barclays' proposed offer are based on1,852,448,094 ABN AMRO Ordinary Shares (as at 18 April 2007 and derived from theannouncement by ABN AMRO and Barclays on 23 April 2007) and on the price ofBarclays ordinary shares of 712.5p at the close of business on 24 April 2007,the day before the Banks first announced details of their proposals including aprice indication, and on the price of RBS Shares of 642.5p at the close ofbusiness on 25 May 2007. 2. The reference to significant and sustained future incremental earningsgrowth for shareholders of the Banks is not intended, nor should it beconstrued, as a profit forecast or be interpreted to mean that ABN AMRO's or theBanks' respective earnings per share for the current or future financial yearswill necessarily match or exceed the historical published respective earningsper share of ABN AMRO or the Banks. 3. The exchange rate used in this announcement is €1.00:£0.6780 aspublished in the Financial Times on 26 May 2007, or, where the context sorequires, €1.00:£0.6802 as published in the Financial Times on 25 April 2007. 4. The financial information relating to Fortis has been extracted fromits consolidated audited annual accounts for the years to which such informationrelates and the interim and quarterly unaudited financial statements for therelevant periods as published by Fortis, all of which are prepared in accordancewith IFRS. 5. The financial information relating to RBS has been extracted from itsconsolidated audited annual accounts for the years to which such informationrelates and the interim unaudited financial statements for the relevant periodsas published by RBS, all of which are prepared in accordance with IFRS. 6. The financial information relating to Santander has been extracted fromits consolidated audited annual accounts for the years to which such informationrelates and the interim and quarterly unaudited financial statements for therelevant periods as published by Santander, all of which are prepared inaccordance with IFRS. 7. The financial information relating to ABN AMRO has been extracted fromits consolidated audited annual accounts for the years to which such informationrelates and the interim and quarterly unaudited financial statements for therelevant periods as published by ABN AMRO for the relevant periods, all of whichare prepared in accordance with IFRS. None of the Banks accepts responsibilityfor the accuracy or completeness of such information. 8. The total promised and delivered synergies in the Generale Banktransaction are derived from the Fortis Investor Day Presentation published on 2October 2003. 9. The total promised and delivered synergies in the acquisition ofNatWest by RBS are derived from the RBS 2002 annual results presentation. 10. The total promised and delivered synergies in the acquisition of Abbey bySantander are derived from the announcement of the acquisition of Abbey Nationalplc by Santander published on 26 July 2004, and the Abbey Results Presentationof 1 February 2007. 11. The profit before tax figures for the businesses being acquired by each ofthe Banks under the proposed Offer, as set out on page 9, are based on estimatesprepared by the management of each of the Banks. In the preparation of theseestimates the Banks have taken account of the profit before tax reported foreach of ABN AMRO's divisions, as set out in ABN AMRO's 2006 Annual Report &Accounts, and have made adjustments including but not limited to: a. The figures have been taken from ABN AMRO's stated figures beforeconsolidation of private equity and excluding discontinued businesses. b. The figures have been adjusted for certain restructuring costs andother one-off or non-recurring items, as stated by ABN AMRO in its 2006 AnnualReport & Accounts and preliminary financial results for the 2006 financial year(published on 8 February 2007). c. The figures exclude purchase accounting adjustments relating toAntonveneta, amounting to •(336) million before tax. d. The figures have been adjusted to reflect certain of the differencesbetween the Business Unit ("BU") definitions in ABN AMRO's 2006 Annual Reportand Accounts and the planned division of ABN AMRO's businesses followingreorganisation. These adjustments include the Banks' estimates of the profitbefore tax achieved by certain operations including the former Wholesale Clientsdivision (as defined by ABN AMRO in the 2005 Annual Report) operations within BUNetherlands and Interbank. The Banks' estimates are not audited and may not beaccurate. The profit before tax figures have not been adjusted for certain othersuch differences due to the unavailability of public information, including inrespect of profits derived from corporate clients within BU Latin Americaexcluding Brazil. e. Adjustments to ABN AMRO's reported figures in respect of non-recurring,non-operating and similar items have been made based on assumptions andestimates made by the Banks. These estimates are not audited and may not beaccurate or comprehensive. APPENDIX V DEFINITIONS The following definitions apply throughout this announcement unless the contextotherwise requires: "ABN AMRO" ABN AMRO Holding N.V. "ABN AMRO ADS" an American Depositary Share of ABN AMRO, evidenced by an American depositary receipt, each representing one ABN AMRO Ordinary Share "ABN AMRO EGM" the extraordinary general meeting of ABN AMRO shareholders to be convened for the purposes of considering the Bank of America Agreement "ABN AMRO Group" ABN AMRO and its subsidiaries and subsidiary undertakings "ABN AMRO Ordinary Share" an ordinary share in the capital of ABN AMRO, nominal value • 0.56 per share (including such shares underlying ABN AMRO ADSs) "ABN AMRO Share" an ABN AMRO Ordinary Share or an ABN AMRO ADS "ADR" an American Depositary Receipt "ADS" an American Depositary Share evidenced by an American depositary receipt "AFM" The Netherlands Financial Markets Authority (Autoriteit Financiele Markten) "AUM" assets under management "Bank of America" Bank of America Corporation "Bank of America Agreement" the Purchase and Sale Agreement, dated as of April 22, 2007, between Bank of America and ABN AMRO Bank N.V. in respect of ABN AMRO North America Holding Company, the holding company for LaSalle Bank Corporation, including the subsidiaries LaSalle Bank N.A. and LaSalle Bank Midwest N.A., including any amendment thereto "Banks" Fortis, RBS and Santander "Barclays" Barclays Bank plc "BFIC" Banking, Finance and Insurance Commission (Belgium) "Boards" the Supervisory and Managing Boards of ABN AMRO, unless otherwise specified in the text "CBFA" Commission Bancaire Financiere et des Assurances "Citizens" Citizens Financial Group, Inc., a wholly-owned subsidiary of RBS "Convertible Financing Preference Shares" the convertible financing preference shares in the capital of ABN AMRO with a nominal value of €0.56 each, which are evidenced by depositary receipts "Decree" Dutch Decree on the Supervision of the Securities Trade 1995 "DNB" De Nederlandsche Bank "EPS" earnings per share "Formerly Convertible Preference Shares" the (formerly convertible) preference shares in the capital of ABN AMRO with a nominal value of €2.24 each "Fortis" Fortis N.V. and Fortis SA/NV "FSA" UK Financial Services Authority "LaSalle" LaSalle Bank Corporation, a wholly-owned subsidiary of ABN AMRO North America Holding Company, or, where the context so requires, ABN AMRO North America Holding Company and its subsidiaries from time to time "LaSalle Situation" any proceedings, claims or actions asserted against ABN AMRO (or any member of the ABN AMRO Group) by Bank of America or any of its affiliates, in each case to the extent arising out of or related to the Bank of America Agreement "LSE" London Stock Exchange plc "Merrill Lynch" Merrill Lynch International "New RBS Shares" the new ordinary shares to be issued by RBS as part of the consideration in the proposed Offer "NYSE" the New York Stock Exchange operated by NYSE Group, Inc. "Offer" the proposed offer to be made by RFS Holdings for all of the issued and to be issued ABN AMRO Shares "Official List" the Official List maintained by the FSA "Options" the options or awards held under ABN AMRO share option schemes entitling holders to receive ABN AMRO Shares "RBS" The Royal Bank of Scotland Group plc "RBS ADS" an American Depositary Share issued by RBS, evidenced by an American depositary receipt, each representing such number of RBS Shares as will be designated in the deposit agreement once entered into. "RBS Share" an ordinary share in the capital of RBS "RFS Holdings" RFS Holdings B.V., a special purpose vehicle company incorporated in the Netherlands through which the Banks will make the proposed Offer "Santander" Banco Santander Central Hispano, S.A. "SEC" US Securities and Exchange Commission "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland and its dependent territories "UKLA" UK Listing Authority "US" or "United States" the United States of America (including the states of the United States and the District of Columbia), its possessions and territories and all areas subject to its jurisdiction This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
RBS.LBanco Santander