|
DnB bids for Postbanken
|
 |
March 23, 1999: 6:43 a.m. ET
$579M offer for Nordic bank, but low price raises prospect of bidding contest
|
LONDON (CNNfn) - Another banking merger hit European markets Tuesday after Norway's Den norske Bank announced plans to acquire state-owned Postbanken for $579 million in a stock and cash deal.
However, DnB is offering less for the country's fourth-largest bank than bidders in a three-way merger deal involving Postbanken which collapsed at the end of last year. Analysts said this could encourage a counter bid in Norway's fragmented financial sector.
The merger of DnB and Postbanken would create Norway's largest financial institution and the eighth-largest in Scandinavia with assets of $41 billion. DnB reorganized its business units in February and aims to slash 450 million Norwegian crowns ($58 million) from annual operating costs by 2003.
"DnB and Postbanken have complementary strengths and will together enhance the services provided to the various customer segments," said DnB group managing director Svein Aaser.
The bank, which is 52 percent-owned by the Norwegian government, plans to retain Postbanken's brand name and operate it as a unit focusing on the retail market.
Norway's Christiania Bank tried to buy Postbanken at the end of last year as part of a three-way tie-up involving Fokus Bank. "Curiously, DnB is offering less than Christiania which always raises the possibility of a counter bid," said Ian McEwen at Lehman Brothers.
Sweden's Handelsbanken and Denmark's Den Danske - which both sought to acquire Fokus when the Christiania deal collapsed - are seen as possible bidders, as is Sweden's SE-Banken.
The Scandinavian financial sector has seen a slew of consolidation over the past year as banks seek to break out of congested domestic markets and compete on a regional basis.
Domestic consolidation is least advanced in Norway where political and regulatory hurdles have already sunk a number of deals. "This is only the beginning. Norway is an incredibly fragmented market," said McEwen.
The deal is subject to regulatory approval, which the companies hope to achieve by May 14.
|
|
|
|
|
 |
|
