Matt's Roman trip in ruins

IN Rome, Matt Barrett and his fellow Barclays directors have been whooping it up in the opulent Hotel Eden. On the other side of the Atlantic, Barclays' putative partner, Bank of America, is spending £28bn absorbing FleetBoston Financial.

Every few years, after the US banks have repaired their balance sheets, there is a spate of amalgamations. The creation of modern Bank of America, the coming together of the old Californian based-group and Charlotte-based NationsBank, was just such a merger.

Now Bank of America is extending its reach right into New England (where Royal Bank of Scotland has an interest) with the purchase of Fleet, which was badly holed by loans to Enron and Argentina.

We tend to forget when we look at our own monolithic banks that US banking is still very regional. So an acquisition like Fleet is only a bolt-on in national terms. It does mean that Bank of America has the western and eastern seaboards, as well as the South, well covered.

It also means that with more than 10% or so of US banking assets, its opportunities for further domestic expansion - without upsetting regulators - may be limited.

There is a view among some senior City bankers that Britain is of little interest to the big American banks.

Deals are seen as too costly and questions are raised about the suitability of Britain as a jump-off point for the Continent. But I would not be as dismissive.

If and when Bank of America successfully absorbs Fleet, there must be the possibility that it will look towards Europe and perhaps Barclays - a strong player in Britain and Spain (and clearly with some interest in Italy other than the cuisine).

As it is the BofA/Fleet deal hardly passes the present British corporate governance test. There is an element of jobs for the boys with Fleet's chairman-chief executive Chad Gifford taking the chair at the merged bank and Bank of America's boss Kenneth Lewis, architect of the deal, becoming chief executive.

A new board will absorb 12 BofA directors and seven from Fleet. None of this is very promising for a successful integration on the lines of RBS/NatWest where RBS managers were fully in charge.

It is certain that the BofA/Fleet deal will not be the last in American banking. Other lower-ranked players including Wells Fargo and Wachovia are thought to be among those that could be takeover targets.

Back home Barclays has recently settled for some second-line acquisitions. It has absorbed Charles Schwab and is now spending £210m on Gerrard Management Services which improves its reach in wealth management.

These are by no means transforming transactions. They add to the services that Barclays will presumably offer clients through their branch network. But they do remind one a little of NatWest's attempts, under Derek Wanless, to create a mini-investment bank from scratch. We know how disastrous that eventually proved to be.

Bankers rarely learn from past mistakes despite all the contemporary discussion of pricing risk, customer focus and strategic planning. Barclays shareholders have to be careful that Barrett and company do not make the kind of errors that will dissuade an overseas merger partner from eventually doing a deal.

Sweet dreams
IN a food universe dominated by Coke, Unilever, Nestle and other giants, Cadbury Schweppes has made a good fist of being a successful niche player.

Shrewd acquisitions such as Dr Pepper and clever forays into the trendy fizzy drinks market in the US have generally kept the company up with of the pack.

It is not surprising that a new chief executive, the American Todd Stitzer, should want to embark on a rationalisation programme to make sure the overheads are under control.

Managing 133 factories around the world does seem a trifle excessive, although closing 20% of them will not mean a very happy holiday season for the 5,500 or so workers who lose their jobs.

One starts to worry about Stitzer's plans when he sets prescriptive targets for sales growth of 3% to 5% a year. In recent times we have seen at other companies, from BP to Unilever, that such transparency can become a hostage to fortune. Failure to hit the target can chew up the share price.

Still, one cannot blame Stitzer for trying. If the worst comes to the worst, the company's better cost profile could make it a tasty acquisition target.