In a joint release, the companies said they have agreed to enter a strategic alliance to develop, finance and manage real estate projects. "By choosing ABN Amro as its strategic partner, Bouwfonds is fulfiling its ambitions to expand its strong position in the Netherlands and in time become a major player in the European real estate market. The alliance will enable ABN Amro to broaden its mortgage and other real estate activities, both domestically and within Europe," the companies said. ABN plans to finance the transaction from its own resources, and said it expects the transaction to have a positive impact on the groups earnings per shares of 5 guilder cents in 2000 to "several tens of guilder cents from 2003 onwards."

ABN saidthe deal will increase its share of the Dutch residential mortgage market to 25%, and that the partnership will benefit from ABN's knowledge of residential mortgage loans "particularly with regard to product development, portfolio management and securitization."

Shares in Bouwfonds are held by 479 Dutch municipalities, and ABN said it will make them a definitive offer after conducting due diligence. ABN will make the offer unconditional if the municipalities tender 85% or more of shares. Bouwfonds released its first-half earnings Thursday morning, and reported a net profit of 102.6 million guilders, versus 90.9 million guilders in the first half of 1998, an increase of 12%.

The Wall Street Journal