The acquisition of Handelsbanken Denmark is expected to further strengthen Jyske Bank’s market position, and expand the volume of its business by nearly one-fifth
Handelsbanken's branch office in Wetherby, England. (Credit: Mtaylor848/Wikipedia)
Jyske Bank has signed a binding agreement with Swedish consumer banking company Svenska Handelsbanken to acquire the latter’s business activities in Denmark.
Under the terms of the agreement, the Danish bank will pay a cash consideration that will be determined at the time of closing, along with a goodwill payment of DKK3bn ($430m).
As part of the transaction, Handelsbanken Denmark clients and data will be transitioned from BEC to Bankdata in 2023.
The bank is expected to issue AT1 and Tier 2 capital of around DKK 2.5bn ($355m), primarily in the form of covered bonds, supplemented by senior non-preferred debt and traditional senior debt.
The transaction is expected to close in the fourth quarter of this year, subject to receipt of approvals from the relevant regulatory and anti-trust authorities.
Handelsbanken is responsible to pay the exit fee if the company chooses to terminate the transaction.
Jyske Bank CEO and managing director Anders Dam said: “The acquisition of Handelsbanken Denmark is an attractive opportunity to strengthen our market position and long-term competitiveness.
“Handelsbanken Denmark is a well-run bank, delivering a strong suite of solutions to both private and corporate clients across the country.
“Through the acquisition, we can further develop the combined business, benefitting our clients, create new career opportunities for our skilled employees, and generate value for our shareholders.”
Jyske Bank said that the acquisition of Handelsbanken Denmark will further strengthen its market position, and expand the volume of its business by nearly one-fifth.
The large scale of the transaction would enable the bank to further develop and provide attractive products and services to its current and future clients.
Furthermore, Jyske Bank will continue to offer competent and personalised advice, localised decision-making, competitive products, and a modern, digitalised bank to Handelsbanken Denmark’s clients.
The clients would benefit from Jyske Bank’s nationwide presence, close proximity to a physical branch in the local area and access to a large branch network.
BofA Securities served as financial advisor and Bech-Bruun as legal advisor to Jyske Bank on the transaction.
Jyske Bank group strategy director Lars Stensgaard Mørch said: “Jyske Bank has greatly appreciated a good, professional and constructive negotiation process, which has led to an agreement that is attractive for all parties.”