Thelack of synergies between NordeaBank AB (publ) and ABN AMRO Group NV and the reticence of the Dutchgovernment to hand over its majority stake in ABN AMRO make any merger of thetwo banks very unlikely to succeed, analysts told S&P Global MarketIntelligence.

ReportsOct. 6 indicated that Nordea made an approach to ABN AMRO's management board in June over apotential takeover, only to be told instead to approach the Dutch state holdingcompany, NL Financial Investments. Negotiations reportedly collapsed inSeptember when Nordea was told that its offer was unacceptable.

NordeaChairman Björn Wahlroos is said to have suggested a reverse takeover through ashare exchange that would have allowed the bank to move its headquarters to theNetherlands, but one Nordic banking analyst said Wahlroos "can just dreamon."

Thefailed takeover and eventual nationalization of ABN AMRO at the height of theglobal financial crisis "is very clear in the memory of Dutch politiciansand the Dutch public," said the analyst, who asked not to be named. Hesaid there is zero chance of the potential tie-up going ahead within the next12 months.

Nordeais Sweden's largest bank, with a sizable presence across the Nordic countries,while ABN AMRO is the Netherlands' third-largest bank by assets. The originalABN AMRO was bought and broken up by a consortium of Royal Bank of Scotland,Santander and Fortis. Following the collapse of Fortis, the Dutch governmentacquired a stake in the original Dutch business of ABN AMRO, eventuallyfloating a 23% stake in November 2015.

PeterWallin, an analyst with Handelsbanken Capital Markets, told S&P GlobalMarket Intelligence that the deal "doesn't make any sense" from theperspective of potential synergies, as the banks have little geographicaloverlap that could lead to cost savings. He also said there was no need tostructure the deal as a reverse takeover, as Wahlroos reportedly suggested toget around Swedish regulatory scrutiny, since Nordea could in theory shift itsheadquarters to Denmark or Finland, where it already has operations and whereit would be subject to ECB, rather than Swedish, regulation.

Nordea,he said, might have seen an isolated opportunity to make a very favorable"long-shot" deal with the Dutch government and taken it.

ABN AMRO, for its part, was surprised by Nordea's approachand was never looking for a buyer, an unnamed official from the bank toldReuters. "ABN is not in play. We were baffled by the approach by Nordeaand referred it to our largest shareholder, the (NLFI), who rejected it. End ofstory," the source reportedly said.