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Commercial banks

NAB Fuels Expectations of UK Acquisition or Merger

Strategic Insights

— 1 min read

National Australia Bank (NAB) yesterday highlighted the opportunity for a UK acquisition or merger, further fuelling expectations of a deal with Bank of Scotland or Abbey National. The bank's managing director, Frank Cicutto, addressed a Securities Institute lunch in Australia, stating that NAB had been highly encouraged by talks with UK regulators and government about moving to a dual-listed company (DLC) structure. NAB may be considering a structure where an enlarged NAB is listed in London and Sydney, rather than merging its existing European operations with a UK outfit. The bank has been exploring various options, including internal and external DLCs, mergers, and alliances, but has declined to give further details.

Key Takeaways:

  • NAB is considering a UK acquisition or merger, fueling expectations of a deal with Bank of Scotland or Abbey National.
  • Frank Cicutto, NAB's managing director, stated that the bank had been encouraged by talks with UK regulators and government about moving to a dual-listed company (DLC) structure.
  • NAB may be considering a structure where an enlarged NAB is listed in London and Sydney, rather than merging its existing European operations with a UK outfit.
  • The bank has explored various options, including internal and external DLCs, mergers, and alliances, but has declined to give further details.
  • NAB has been talking to various companies, but has not ruled out a potential deal with Bank of Scotland or Abbey National.
  • Abbey National's announcement of wanting to acquire Bank of Scotland nearly three weeks ago may have been a merger approach, but has been met with annoyance by the Edinburgh-based institution.
  • NAB's sale of Michigan National subsidiary to ABN Amro of the Netherlands for US$2.75bn may be freeing up capital for a big UK acquisition.
  • NAB's listing options include indirectly listing its UK business via a Dutch or Luxembourg Crown, allowing the bankers to avoid the strict UK capital requirements.

Statistics:

  • US$2.75bn - the sale price of Michigan National subsidiary to ABN Amro of the Netherlands.
  • #1.95bn - the sterling equivalent of the sale price of Michigan National subsidiary.
  • Nearly three weeks ago - the time frame in which Abbey National announced its intention to acquire Bank of Scotland.

Sources:

  • The Australian
  • National Australia Bank
  • Securities Institute

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