Nordea, DNB sell Baltic bank stake to Blackstone in US$1.2bil deal

OSLO: Nordea and DNB have agreed to sell a 60% stake in Baltic bank Luminor to a Blackstone private equity consortium for 1 billion euros (US$1.16bil) in cash, the two Nordic banks said on Thursday.

Luminor, the third biggest bank in the Baltic region with assets of 15 billion euros, was formed by the 2016 decision to merge Nordea’s and DNB’s operations in Estonia, Latvia and Lithuania.

“The transaction represents the largest majority stake acquisition of a universal bank by private equity in the last decade globally, and one of the largest M&A transactions in Baltic history,” Blackstone said in a statement.

In the long term, the plan is to seek a stock market listing for Luminor, it added.

While DNB plans to retain a stake of 20% in the venture, Nordea has entered into a forward sale agreement with Blackstone for its remaining 20 % stake over the near to medium term.

“The decision for Nordea to sell the shares in Luminor is pursuant to Nordea’s overall ambition to simplify and focus operations to the Nordic core markets and become an even better bank for its customers,” the bank said.

“This is a good deal for both Luminor and the current owners,” DNB chief financial officer Kjerstin Braathen said.

The transaction would not have any significant impact on its finances, DNB said, while adding that Blackstone would be a solid majority shareholder.

Subject to regulatory approvals the deal is expected to close during the first half of 2019.