December 12, 2007 / 6:07 AM / in 11 years

ABN AMRO to End Rothschild Joint Venture

AMSTERDAM/PARIS (Reuters) - Dutch bank ABN AMRO NV AAH.ASABN.N, bought by three banks in October, is ending its 11-year joint venture with investment bank Rothschild [ROT.UL] at the end of December, the parties said on Tuesday.

The deal is the first major change at ABN since it was taken over by Royal Bank of Scotland (RBS.L), Spain’s Santander (SAN.MC) and Belgian-Dutch Fortis FOR.BR for 70 billion euros ($103 billion).

ABN’s capital markets operations will be integrated with RBS, while Rothschild will focus on advisory services.

“The decision comes after a review by both ABN AMRO and Rothschild of their equity capital markets business objectives following the acquisition,” ABN, RBS and Rothschild said in a statement.

The joint venture will end Dec. 31, ABN said, adding: “The decision also reflects the substantial changes in the global investment banking market place and the evolution of the businesses of both banks in recent years.”

ABN management board member Wilco Jiskoot told Reuters that there would be no financial impact or likely job losses as a result of the decision to end the relationship, as it was a contractual arrangement that involved no capital investment and only the purchase of a “few material assets.”

Asked whether Rothschild would consider another joint venture, Adam Young, the co-Chief Executive of the joint venture, said: “If other parties were interested to talk to us about some other joint venture or partnership arrangement we might very well be open to that.”


Dutch newspaper Het Financieele Dagblad had earlier reported that the venture was due to be ended because the added value of Rothschild, mainly its contacts in the market, has been diluted as companies select their own banks for equity and debt issues.

British bank Barclays (BARC.L), which lost out to the bank trio in buying ABN, was mentioned by the paper as a potential new partner of Rothschild.

Rothschild’s Young said, however, that the investment bank was not in specific discussions with any potential new partners.

Under the ABN takeover deal, RBS is buying ABN’s Asian operations and ABN’s wholesale and investment banking business, including the Rothschild partnership.

ABN AMRO and Rothschild established their partnership in 1996. ABN holds 70 percent and Rothschild the remainder. It employs about 150 investment bankers.

Recent deals for ABN-AMRO Rothschild include the role of joint coordinator and bookrunner for Russia’s $10.6 billion initial public offering of state-controlled oil producer Rosneft (ROSN.MM), Russia’s largest.

The joint venture was also the bookrunner for the 2006 IPO of Dutch bank SNS Reaal SR.AS and it advised Deutsche Post’s (DPWGn.DE) 2000 privatisation via a $5.6 billion IPO.

Additional reporting Gilbert Kreijger in Amsterdam; Editing by Elaine Hardcastle, Gary Hill

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