A consortium led by private equity funds managed by Blackstone has agreed to acquire 60% stake in Luminor Bank for cash consideration of €1bn.
Image: Luminor Group board chairman Nils Melngailis. Photo: courtesy of Luminor Bank AS.
Nordea Bank and DNB Bank, which currently own Luminor Bank, agreed to divest the majority stake to Blackstone consortium.
As a result of the deal, Nordea and DNB will each have a 20% stake in Luminor, which is a major bank in Estonia, Latvia, and Lithuania.
Nordea has also entered into forward sale agreement with Blackstone for the divestment of its 20% stake over the near to medium term.
Nordea personal banking head Topi Manner said: “The sale is the natural next step following the establishment of Luminor in 2017 whereby Nordea and DNB created the third largest bank in the region – a strong stand-alone bank.
“With this transaction we are able to further consolidate our focus and efforts towards our core Nordic markets, and it allows us to redeploy capital into those Nordic markets over the coming years.”
In 2017, Luminor was established through combining operations of Nordea and DNB in the Baltics, turning it as third largest financial services provider in the region.
With a 23% lending market share, Luminor has €15bn worth assets, 3,000 employees and 64 branches across the region. The bank holds more than €8bn of customer deposits, and its total equity is around €1.7bn.
Nordea said it is selling stake in Luminor as part of its strategy to focus more on Nordic core markets and better serve customers in the region.
Subject to customary regulatory approvals, the deal is expected to complete in the first half of 2019.
Luminor Group board chairman Nils Melngailis said: “Blackstone’s investment is fully aligned with the bank’s vision, and their support will both strengthen and accelerate the execution of our strategy to become the leading independent financial group focused on the Baltic region.”
In July this year, Nordea signed an agreement to acquire Norway-based online bank, Gjensidige Bank, in a deal valued at NOK5.5bn (€578m).