SG Finans acquisition could help drive Nordea’s new plans for income growth and optimise operational efficiency support
Image: Nordea Finance expects to close the deal in second half of next year. Photo: Courtesy of Nordea.
Nordea Finance, the asset based finance arm of Nordea Bank has entered into an agreement to acquire SG Finans from Société Générale for €575m ($639m).
SG Finans is a Norway-based subsidiary of Société Générale, offering equipment finance and factoring solutions. The business operates across Norway, Sweden and Denmark, with a workforce of 360.
Subject to customary closing conditions and regulatory approvals, the deal is expected to be completed in the second half of next year.
Nordea Bank stated that the acquisition of SG Finans aligns with its priority to focus on core business in the Nordics. It also supports the company’s new plans to drive income growth initiatives, optimise operational efficiency and create enhanced customer experience.
SG Finans is touted to complement Nordea Finance well with its presence in Norway and direct distribution model. With a customer base of about 50,000 corporates, SG Finans could benefit from Nordea’s full product offerings through the deal.
Nordea president and group CEO Frank Vang-Jensen said: “We are happy to announce this transaction. SG Finans runs a successful business with very satisfied customers in three of our four home markets. This acquisition strengthens our ability to advice and help small and medium-sized corporates with their financial needs.”
The deal is expected to bring a positive impact on Nordea Finance’s total annual income by nearly €140m ($155.7m). It is also expected to result in a small increase in Nordea Group’s earnings per share and return on equity.
Societe Generale deputy CEO and international retail banking activities, financial services and insurance group in charge Philippe Heim said: “With this agreement, Societe Generale makes once again a major step in the execution of its refocusing plan and demonstrates its ability to enter into long term partnerships.
“Societe Generale Equipment Finance is a leading player in equipment finance and Societe Generale will continue to leverage on SGEF’s ability to accompany its international vendors and clients and support the real economy.”
SGEF and Nordea Finance have also agreed for mutual services in vendor solutions
Alongside the deal, Societe Generale Equipment Finance (SGEF) and Nordea Finance have also entered into a partnership, which could offer mutual services in vendor solutions and equipment finance.
Leveraging the geographical complementarity and combined strengths of the two companies, the partnership will provide a range of products and services to international vendors that are clients of equipment finance solutions.
Societe Generale’s vehicle leasing and fleet management division ALD Automotive and Nordea Finance already run a partnership to address mobility needs of corporates, SMEs and private individuals in Denmark, Finland, Norway and Sweden.