Nykredit and the owners of Sparinvest, which comprises 49 branches and seven insurance and pension companies, have entered a conditional agreement for Nykredit to acquire 75 percent of the equities, report the parties in a press release.
"The agreement is subject to the outcome of an ongoing due diligence and approvals by the authorities. The transaction is also subject to approval by the General Meeting of Sparinvest Holdings SE", says the press release.
The parties report that if the transaction is completed, Nykredit will pay DKK 2.245bn (EUR 300m) for the ownership interest.
"In addition, the vendors will receive DKK 155m as dividend for 2018. The ownership interest held by the other shareholders will subsequently be 25 percent", reports the press release.
Following approval of the transaction, Sparinvest will become a subsidiary of the Nykredit Group.
Sparinvest manages assets of about DKK 83bn, whereas Nykredit has DKK 211bn in assets under management.
"Following this transaction, Nykredit's customers will also gain access to the products provided by Sparinvest today. The banks and insurance and pension companies which today distribute Sparinvest's products and which continue as shareholders of Sparinvest, will be able to continue to offer their customers Sparinvest products. Furthermore, they will also get the opportunity to offer their customers Nykredit's investment products", the parties state in the press release.
The parties also report that joining the strengths of the two companies is expected to produce a number of synergies, including lower costs and a stronger focus on the development of skills, concepts and products. In the short term, the transaction is expected to cause Nykredit's costs to increase in 2019.
If the conditions for the transaction are met, closing is expected in Q3/2019.
Michael Rasmussen, CEO of Nykredit, says in the press release:
"Strengthening and expanding the alliance with the partner banks of Totalkredit is a strategic priority. Today we collaborate to provide the best housing loans to homeowners across the country. It is only natural that we are now initiating a partnership with the interested banks to offer top investment products, as many homeowners have savings other than their home equity".
The asset volumes managed by both Sparinvest and Nykredit on behalf of customers have grown in recent years. By joining forces, we can support this development and provide enhanced customer experiences at both Sparinvest and Nykredit," says Rasmsusen.
Klaus Skjødt, Chairman of the Board of Directors of Sparinvest and CEO of Sparekassen Kronjylland, says: "Since the beginning, Sparinvest has been based on a strong collaboration between a group of banks to provide attractive investment products to customers. We are now expanding this collaboration to include Nykredit as a resourceful business partner. Building on Nykredit's expertise, we will be able to offer customers more and even better products than today.
English Edit: Lisa Castey Hall Nielsen