Nordea Bank is set to acquire Nordic challenger bank Gjensidige Bank ASA, in a deal worth around €578m ($672m).
The transaction will also include a ‘long-term strategic mutual distribution’ co-operation with Gjensidige in Norway. The deal is expected to close in Q1 2019.
Following the acquisition, Nordea will increase its customer base by 176,000, with €4.4bn in customer assets. Gjensidige will slowly be integrated into Nordea, which in-turn will receive 170 new employees.
Nordea is expecting to raise around €25m of cost synergies from the merged bank by 2022. The deal is believed to have a positive impact on shares in the first year, and a return on investment of 16 per cent by 2022.
Norway-based Gjensidige Bank is an online bank that offers consumers, banking services, mortgagesm insurance, mortgages, car financing, unsecured loans, savings and investments. Founded in 2007, the bank offers a selection of mobile-based banking solutions and insurance policies sprawling from auto insurance, to per insurance.
Through the acquisition and partnership, Nordea is hoping to offer its services to more Norwegians and offering them tailored services.
Gjensidige CEO Helge Leiro Baastad said, “Our partnership agreement with Nordea will enable Gjensidige to offer a wider range of financing products to both private and commercial customers. The agreement will also provide the opportunity to expand our customer reach through one of the leading Nordic banks with digitalisation and innovation high on the agenda.”
Earlier in the year, Nordea launched a venture capital fund to invest into FinTech startups. The capital pool of Nordea Ventures has not been revealed, but the firm has tapped the fund to invest in Swedish company Betalo. The company offers small businesses with the option to transfer money internationally through a card.
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