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Barclays in $8.1B deal
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August 11, 2000: 4:18 a.m. ET
U.K. bank to buy mortgage lender Woolwich to boost home loan business
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LONDON (CNNfn) - Britain's Barclays PLC struck a deal Friday to buy U.K. mortgage bank Woolwich PLC for about £5.4 billion ($8.1 billion) in cash and stock, bulking up its home loan and Internet divisions.
The alliance will double Barclays' current share of the U.K. mortgage market to roughly 8 percent, and marks the first major strategic move by Barclays Chief Executive Matthew Barrett since he became head of Britain's third largest bank last October.
The terms of the deal were the same as a preliminary offer disclosed Wednesday. Barclays will offer 0.1175 of its shares and 164 pence in cash for each share of Woolwich, a former mutual building society that went public three years ago.
 Based on Thursday's closing stock prices, the accord values each Woolwich (WWH) share at 352 pence, a 4 percent premium over the stock's closing price of 337.50 on Thursday. The stock has jumped more than 25 percent since the two banks revealed that they were in merger talks.
In early Friday trading, Woolwich shares edged up 1.75 pence to 339.25, while Barclays (BARC) stock slipped 1.4 percent, losing 22 pence to 1,559.00.
The combined company will have about 16 million retail customers and 1.4 million online users. The enlarged bank expects to reap pretax savings of about £240 million a year by the third year of joint operation.
"The acquisition of Woolwich is a key step for Barclays in developing its U.K. retail financial services business with a commercial fit which is highly complementary," Barclays Chairman Peter Middleton said.
The merger will give Woolwich CEO John Stewart a key role. He will become deputy chief executive, taking charge of the retail banking unit. 
-- from staff and wire reports
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