August 11, 2007 (LPAC)--The liquidity crisis seizing world credit markets could now claim the ABN Amro takeover deal as its biggest victim, according to financial analysts, and the consequences for the world banking system would be incalculable.

ABN Amro, a large Amsterdam-based bank, has been in the middle of a takeover battle for six months, pitting British-based Barclay's Bank and several partners, against a consortium of Royal Bank of Scotland, its Spanish partner Santander Bank, and the Belgian bank Fortis. At a "value" of 72 billion euros ($100 billion) or so, the takeover was going to be the biggest buyout in history. But conversely, the failure of both offers would fulfill widespread prophecies among financial analysts during this growing global credit crisis, that one really big takeover falling apart would be enough to threaten a banking collapse. Some $300 billion of financing agreements, for leveraged takeovers already announced this year, would tend to become impossible to carry out, leaving the syndicating banks involved with huge losses.

After the financial crisis and global stock sell-off of the past two days, the market value of ABN Amro's stock, which fell by 3.5% on Friday alone, is too low to support the Royal Bank of Scotland consortium's takeover offer. The Barclay's offer is lower, but involves using a lot of Barclay's stock for the buyout; that Bank's stock is also heading steeply south, and there are suddenly many reports that Barclay's will withdraw its bid. But there are also rumors that because of the worldwide credit crunch, Fortis Bank will be unable to finance its part of the buyout for the Royal Bank of Scotland group, torpedoing that bid as well. The takeover "may be derailed," according to Bloomberg News, and a securities analyst quoted by the news service said on Aug. 10, "The share prices are telling you the deal isn't going to happen."