Barclays said it would reduce the banks' combined network to 2,000 from 2100 branches, and would cut 1000 jobs from a combined staff of about 61,100.

However, though some branches will be combined, both companies will maintain a main street brand presence, Barclays said.

Barclays has 3.7% of the mortgage business in the United Kingdom and has more than 55,000 employees in 1,700 British branches. Woolwich has 5.3% of the mortgage business and employs 6,100 staff in 405 branches. The takeover, which should be completed by the end of the year, should enhance earnings in 2001. By the end of the third year, once the merger is completed, Barclays expects to reap total pretax synergies of 240 million pounds a year, with cost savings amounting to 150 million pounds of the total.

Barclays said it also sees additional revenues of 90 million net of costs at the end of the third year. The company said integration with Woolwich would incur pretax restructuring costs of around 150 million pounds. Woolwich's board was expected to unanimously approve the deal, which would more than double the mortgage business for Barclays, the nation's fourth largest bank in terms of market capitalization.

Barclay's chairman Peter Middleton said the takeover was a key step for the bank. "The acquisition of Woolwich is a key step for Barclays in developing its UK retail financial services business with a commercial fit which is highly complementary," he said.

In London trading Friday, Barclays shares fell 11 pence to 15.70 pounds. Woolwich shares climbed 1.2% to 341.5 pence. The confirmation of the deal, which values Woolwich at 352 pence a share, comes two days after the banks revealed they were in takeover talks. Under the terms of the bid, Woolwich shareholders will receive 0.1175 of a new Barclays share and 1.64 pounds for each Woolwich share held. Woolwich shareholders will also be entitled to retain the interim dividend of 4.4 pence, which is payable Oct. 9. Once the bid is completed Woolwich shareholders will own about 11% of the enlarged share capital of Barclays.

The Barclays offer represents a 31% premium over Woolwich's closing share price on Aug. 8, the day before offer talks were announced. Woolwich chairman Brian Jenkins will be appointed deputy chairman of Barclays while Woolwich chief executive John Stewart will become deputy group chief executive.

Stephen Russell, chief executive of retailer Boots Co. PLC and non-executive director of Woolwich, will join Barclays's board as a non-executive director. A new role, Group Director, Integration with responsibility for the integration of Barclays and Woolwich ill be filled by John Varley. The enlarged group will have about 16 million customers, combining Barclays' mortgage business with that of Woolwich, which will become the mortgage brand of the enlarged group. The companies' insurance businesses will also be merged.

Woolwich's Open Plan account, a newly-launched account which pools savings alongside mortgages and loans, will feature prominently in the enlarged group. Open Plan has a customer base of 290,000 customers to date.

-- (The Wall Street Journal)