(Bloomberg) -- DNB Bank ASA will acquire all the shares of rival Swedish firm Carnegie Holding AB for about 12 billion kronor ($1.1 billion) in what is the latest step of banking consolidation in the Nordic market.
The Oslo-based bank entered into an agreement with Carnegie’s main owner, Harald Mix’s Altor Equity Partners, as well as the minority shareholders, to buy the Swedish group in cash, according to a statement on Monday.
The deal follows a spate of merger and acquisition activity in the region in recent years as lenders look to fine-tune strategies in the face of headwinds that include international regulatory costs and competition from challenger banks.
Swedish bank Svenska Handelsbanken AB struck a deal in 2023 to divest its private, life insurance and small-to-medium-sized enterprise operations in Finland. The lender also sold its Danish unit, with assets of almost $10 billion, to Jyske Bank A/S a year earlier in what was the biggest bank deal in Denmark in two decades.
Elsewhere, Finland’s Nordea Bank Abp is expected to complete its acquisition of Danske Bank A/S’ Norwegian personal customer and private banking business later this year.
Rate cuts from central banks also mean the fastest growth in net interest income is over, prompting financial firms to hone in on ways to boost fee and commission income.
“The transaction marks a step change in increasing the share of fee related income for DNB as a whole,” Chief Executive Officer Kjerstin Braathen said in the statement.
Carnegie Holding is the parent company of the Carnegie Group, comprising a Nordic investment bank and asset manager with 850 employees. The group revenue is split 56% from investment services and 44% from wealth management.
Carnegie was acquired by Altor in 2009 with the strategic objective to build the leading investment bank and asset manager in the Nordic region. The Swedish bank had long been considered a candidate for an initial public offering. In June, Altor partner Mix said that the group was a good fit for the stock exchange but declined to give a timeline.
DNB Markets will be globally renamed DNB Carnegie. The transaction is expected to compete in the first half of next year, and closing conditions include regulatory approvals.
In September, Carnegie had 436 billion kronor in assets under management, spanning private banking and asset management, and reported net income of 535 million kronor for the first nine months of the year.
--With assistance from Stephen Treloar and Christian Wienberg.
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