Norway’s largest bank, DNB (DNB.OL), is set to acquire Swedish investment bank and asset manager Carnegie for 12 billion Swedish crowns ($1.14 billion).
The all-cash transaction, agreed with private equity firm Altor and minority stakeholders, is expected to close in the first half of 2025, pending regulatory approval.
The deal is part of DNB’s strategy to expand its reach in the Nordic region and enhance its fee-based revenue, aligning with the bank’s efforts to diversify and boost its income streams amid changing market dynamics.
DNB targets revenue growth, not job cuts, in Carnegie acquisition
DNB anticipates that the acquisition will primarily drive income growth rather than cost synergies.
The bank’s Chief Financial Officer, Ida Lerner, highlighted that the focus is on leveraging the combined capabilities of both firms.
DNB expects the deal to yield a return on invested capital above 15%, thanks to improved efficiency and a strengthened client offering.
Unlike some other recent banking mergers, this acquisition does not include plans for job reductions, signaling DNB’s emphasis on maintaining expertise and continuity within its operations.
Nordic banking sector sees renewed M&A activity
The acquisition comes as mergers and acquisitions in the Nordic banking sector gain momentum.
DNB’s purchase of Carnegie follows other regional moves, such as Nordea’s acquisition of Danske Bank’s Norwegian operations and Handelsbanken’s sale of its Finnish business for €1.3 billion.
As European banks navigate shifting economic conditions and falling interest rates, deals like DNB aim to secure growth through expanded client services and a broader geographic footprint.
DNB expects a 15% return on capital from Carnegie integration
By integrating Carnegie, which manages 436 billion crowns in assets, DNB plans to create a more competitive Nordic banking platform. The acquisition is anticipated to enhance DNB’s offering to clients and unlock new revenue opportunities, positioning the bank for sustained growth.
DNB’s financial advisors for the transaction include DNB Markets and Morgan Stanley, while Carnegie is being advised by Goldman Sachs, Carnegie Investment Bank, and Lenner & Partners.
The acquisition of Carnegie, with its 850-strong workforce, is viewed by DNB as an opportunity to integrate valuable expertise and reinforce its service capabilities. The bank emphasized the cultural fit and knowledge-sharing potential between the two entities, highlighting the strategic nature of this acquisition.
With the Nordic financial market undergoing shifts, DNB aims to leverage Carnegie’s strong market position to bolster its service offerings and client relationships.
The purchase of Carnegie aligns with broader trends in Europe, where banks are increasingly turning to mergers and acquisitions to diversify revenue streams.
While giants like BNP Paribas and UniCredit are making similar moves in their respective markets, DNB’s focus on income synergies rather than cost-cutting sets its approach apart.
As DNB prepares to report its quarterly earnings, the acquisition is expected to be a key factor in shaping its outlook and strategy for the coming years.
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