The scale of this potential match-up would make it one of the worlds largest Banks.

BARCLAYS has approached Dutch bank ABN Amro with an ambitious merger plan that would create a global banking powerhouse worth £80 billion.

The informal approach occurred after ABN Amro became embroiled in a bitter battle last month with activist hedge fund, The Children’s Investment Fund (TCI).

Barclays and ABN combined would create one of the world’s biggest banking groups

Source: Barclays in £80bn offer to ABN Amro-Business-Industry Sectors-Banking & Finance-TimesOnline

There would be nearly 50 million customers in the potentially combined entity.

A deal would also be the biggest ever cross-border banking transaction in Europe, creating a group with 47m customers and more than 220,000 staff. Barclays operates in 50 countries and ABN in 53.

This is not the first time these two have chatted, but the current driver of the contact is pressure from a hedge fund, to break up ABN because of under-performance.

The informal approach occurred after ABN Amro became embroiled in a bitter battle last month with activist hedge fund, The Children’s Investment Fund (TCI).

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TCI, which has a 1% stake in ABN Amro, is demanding the Dutch bank considers breaking itself up or an outright sale after years of underperformance.

Analysts believe that TCI’s attack could be the catalyst for a sale. Bankers say Barclays wants to position itself as ABN’s partner of choice.

The approach is not the first time that the two banks have had contact about a possible tie-up. Two years ago Barclays and ABN held serious talks about a merger.