In a statement to the Oslo stock exchange today, Den Norske Bank (DnB) and Storebrand said they had agreed on all the main issues prior to a merger. The merger will protect both DnB and Storebrand from potential Nodic predators. It will have sufficient scale to compete with the largest banks in the Nordic region, and to acquire businesses itself. The name of the new group will be DnB Storebrand, with the banking franchise operating as Den norske Bank and Postbanken, and the combined life insurance activities as Storebrand. The two parties will divest themselves of their non-life insurance operations.
The merger will create a bancassurer with assets of NOK 500 billion ($63 billion) under management, making it one of the four largest asset managers in the Nordic region. It will also protect both DnB and Storebrand from Nordic predators. The parties have agreed that it will be possible within three years to achieve net synergies of NOK 750 million per year. Personnel reductions of approximately 750 full-time equivalents will be achieved primarily through natural attrition and voluntary redundancy.
The owners of approximately half of Storebrand’s shareholders have indicated their support of the merger at the advertised price. The Government Bank Investment Fund, which owns 48 per cent of DnB, also supports the merger. Shareholder and regulatory approvals are expected to be secured no later than August this year.
” I am very happy to be able to present this merger,” says Svein Aaser, CEO of DnB. “It will create a long-term viable financial institution in Norway with the ability to compete effectively inside and outside of Norway. The new group will be uniquely positioned to benefit from the expected high growth of the Norwegian savings markets. In addition to creating value for our shareholders, the new group will aim to be the most attractive place of employment in the Norwegian financial industry.”
“Together with DnB, Storebrand will be a leader within life insurance, long-term savings and banking says Idar Kreutzer, CEO of Storebrand and Deputy CEO of the new group. “The new group will unite and develop further the best of two organisations basing their operations on strong competence, innovative customer solutions and long traditions. DnB Storebrand will have a strengthened and broader product offering, and Storebrand’s customers will get access to the group’s products and services through a broader distribution network.”