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Nordic bank giant created
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March 6, 2000: 8:23 a.m. ET
MeritaNordbanken, Unidanmark to merge; will have $178B in assets
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LONDON (CNNfn) - Swedish-Finnish bank MeritaNordbanken said Monday it agreed to buy Unidanmark, Denmark's second-largest bank, for $4.75 billion in stock, creating the Nordic region's biggest financial institution with 186 billion euros ($178.2 billion) in assets.
The new company will combine MeritaNordbanken's strong position in the Swedish, Finnish and Baltic markets with Unidanmark's retail banking and insurance services in Denmark. It will have 9 million customers and expects to save 200 million euros a year within three years.
"There is strategic logic in this move but this is not the end of the story," said William Hawkins, an analyst at Fox-Pitt, Kelton, adding that a third party might make a rival offer for Unidanmark.
Shares in MeritaNordbanken rose 0.9 percent Monday to 5.80 Swedish crowns while Unidanmark rose 11.6 percent to 500 Danish crowns.
The purchase reflects a growing trend by banks in the Nordic region to expand beyond their relatively small domestic markets.
SEB, Sweden's leading bank, agreed in January to acquire Norway's Orkla Finans, creating the largest investment bank in Scandinavia.
In September 1999, MeritaNordbanken offered $3 billion for Norway's Christiania Bank, but the Norwegian government, which holds a large stake in the target company, has effectively blocked the deal.
Today, Merita and Unidanmark called on Christiania shareholders to accept the MeritaNordbanken offer and join the new financial giant.
MeritaNordbanken offered 12.704 of its shares for each Unidanmark share and said the Danish bank's shareholders would also receive a special dividend of 10 Danish crowns ($1.28) per share.
Shareholders of Helsinki-based MeritaNordbanken will hold 70 percent of the new company.
E-banking growth expected
The deal will form a bank with 1.4 million Internet customers and 8.5 million retail customers in the three Nordic countries. MeritaNordbanken said the merger provides "an excellent base for a rapid growth of electronic financial services."
The combined group will account for 20 percent of the Swedish banking market, 25 percent of the Danish and 40 percent of the Finnish.
MeritaNordbanken Chief Executive Hans Dalborg will be chief executive of the new company and Unidanmark Chief Executive Thorleif Krarup will take over the post next year. The company will be based in Sweden with shares trading in Sweden, Denmark and Finland.
The bank said it would cut 800 jobs over the next three years from a combined workforce of 28,050. The company plans to buy back 10 percent of its shares.
MeritaNordbanken was formed through the merger of Finnish Merita and Swedish Nordbanken Nordic Baltic in 1998. Analysts said Unidanmark has been seen for some time as a possible partner for the company. 
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