The Bank of Scotland has launched a £20.8bn takeover bid for National Westminster.
The announcement throws into doubt NatWest's proposed takeover of insurer Legal & General.
If the deal goes through BoS says NatWest would remain a seperate unit and retain its name.
Following the offer, NatWest shareholders will hold approximately 68% of the merged bank
BoS said it would sell off non-core NatWest businesses. This could include its asset management arm Gartmore.