ABN AMRO - Offer Update

The Managing and Supervisory Boards of ABN AMRO (the "Boards"), in their respective meetings on 26 and 27 July 2007, discussed the Consortium offer and the proposed Barclays offer (each an "Offer", together, the "Offers") with a view to coming to a reasoned position on both Offers taking into account the best interest of the Company's shareholders and other stakeholders.

In doing so, the Boards assessed each Offer in the context of the following elements:

1. Interest of shareholders and other stakeholders

Shareholders: the current value of the Offers, the mix of consideration, the degree of sensitivity, as appropriate, of the value of the Offers to the offerors' share prices, proposed synergies and ABN AMRO's strategic vision;
Employees: career opportunities, commitments, any proposed gross and net redundancies and the formal advice and opinions of, as well as views expressed by, employee representative bodies;
Customers: service quality and continuity with regard to product offerings and business model;
Creditors: financial strength and long-term ratings of the ongoing businesses.
The Boards would anticipate that the DNB and other regulators, in performing their roles and making their final determinations, will discipline and monitor both offerors in the best interest of customers, creditors, the financial system and society at large.

2. Risks associated with each proposed transaction:

Execution risks, including the likelihood and timing of regulatory and shareholder approvals, the wording of "Material Adverse Change" clauses and other pre-offer and offer conditions or fiduciary outs of each Offer;
Post –acquisition risks: where relevant, break-up and integration risks, capital adequacy and funding, legal and compliance risks and business integrity risks;
3. Corporate Governance:

Where relevant, Headquarter location, Board structure and representation, likely distribution of senior and middle management positions.
Barclays Offer
Barclays announced on 23 July the proposed terms of its revised Offer. Barclays expects to launch such Offer as soon as practicable, subject to, inter alia, regulatory approval for the Offer to be made.
The Revised Barclays Offer includes amended offer terms and has introduced a significant cash element, together with a mix-and-match alternative. The value of this offer, however, remains highly dependent on the share price performance of Barclays.
The Boards note that the proposed merger with Barclays is consistent with ABN AMRO's previously articulated strategic vision. In addition, the strategic cooperation with China Development Bank should further enhance the growth opportunities of a potential combined Barclays/ABN AMRO group in the attractive Asian market and could result in creation of additional longer-term value for ABN AMRO shareholders.
The proposed transaction with Barclays is understood to be well on track to receive the required regulatory approvals and generally has acceptable and manageable post acquisition risks.
The Boards also took into account the positive opinion of the European Staff Council and the positive advice of the Central Works Council in respect of the proposed combination with Barclays, received by ABN AMRO as part of the consultation process. The Boards also noted the commitments made to employees and trade unions in respect of employee's rights and respecting of existing agreements.
The approval of the shareholders of Barclays is still outstanding and currently expected at the earliest mid-September 2007. The outcome of that vote remains uncertain at this stage.
As at the market close on 27 July 2007, the Barclays offer was at a 1.0% discount to the ABN AMRO market price and at an 8.8% discount to the see-through value of the Consortium offer.
The Boards are therefore, notwithstanding their support of the strategic benefits of the combination with Barclays, not currently in a position to recommend from a financial point of view the Barclays Offer for acceptance to ABN AMRO shareholders.

Consortium Offer
The Consortium formally launched its Offer on 21 July 2007. The tender offer period, if not extended, is expected to end on 5 October 2007.
The current value of the Offer, with its high cash component, is attractive to the ABN AMRO shareholders. As at the market close on 27 July 2007, the Consortium offer was at a premium of 8.5% to the ABN AMRO market price and of 9.6% to the Barclays Offer's implied value.
The Boards welcome the efforts made by the Consortium in establishing a dialogue with the ABN AMRO employee representative bodies and the commitments made to the ABN AMRO employees with respect to redundancy procedures.
The Boards have identified a number of significant risks to the Consortium offer:

Whereas sources of integration risks are broadly similar to those identified for the Barclays Offer, the ABN AMRO Boards have significant unresolved questions about the proposed break-up of ABN AMRO and the proposed methodology of the Consortium to implement such a break-up (as also explained to the Consortium on 5 May and included in our press release dated 14 May 2007);
Whereas Santander shareholders have already approved the proposed transaction, approvals of the shareholders of Fortis and RBS are still outstanding and expected at the earliest on, respectively, 6 August and 10 August. The outcome of those votes remains uncertain at this stage;
The approval of the proposed transaction by the Ministry of Finance and the views of the Dutch Central Bank in this respect remain uncertain, including as to timing and associated conditions of any such approval, particularly in view of the proposed break-up;
The broadly defined "Material Adverse Change" clause as it is currently worded in the Consortium Offer is more onerous and uncertain than the proposed equivalent Barclays clause.
Taking the above factors into account, the Boards of ABN AMRO are not currently in a position to recommend the Consortium Offer for acceptance to ABN AMRO shareholders.

Conclusion
In light of the above, the Boards are not currently in a position to recommend either Offer for acceptance to ABN AMRO shareholders. ABN AMRO will further engage with both parties with the aim of continuing to ensure a level playing field and minimising any of the uncertainties currently associated with the Offers with a view to optimising the attractive alternatives available to ABN AMRO's shareholders.
ABN AMRO and Barclays have agreed further amendments to the Merger Protocol and the Merger Protocol, as amended, remains in effect. Under the amended merger protocol, it remains a condition for the Barclays offer that ABN AMRO recommends the Barclays offer. Additionally, ABN AMRO will be free to discuss the Consortium offer with the Consortium and its advisers. -ABN AMRO

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