Barclays to but Woolwich for £5.4bn

Barclays Bank has announced it has agreed to buy the Woolwich in a friendly takeover that values the smaller bank at around £5.4bn.

Barclays Bank has announced it has agreed to buy the Woolwich in a friendly takeover that values the smaller bank at around £5.4bn.

The fourth and ninth largest financial groups in Britain revealed last Wednesday that they were negotiating a merger which would double Barclays' share of the UK home loan market.

The cash and shares offer from Barclays values Woolwich at 352p a share, against the a closing price on Thursday of 337.5p.

Barclays is, as predicted, offering 164p in cash and 0.1175 Barclays shares for each Woolwich share.

John Stewart, chief executive of Woolwich, will hold a key role at the new group as deputy chief executive officer responsible for retail financial services. The Woolwich brand name and branches will also be retained.

The buy-out represents the first big strategic move by Barclays' Irish-Canadian Chief Executive Matthew Barrett since his appointment last year.