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DnB in late bid to foil Sampo/Storebrand merger

FINLAND/NORWAY – Den Norske Bank (DnB) made an eleventh hour bid for Norwegian asset manager Storebrand last night (May 20), just before Finnish financial services group Sampo and Storebrand were to hold a press conference promoting a merger between the two, a deal which would create the sixth largest asset manager in the Nordic region.

The board of Storebrand, however, seems to favour the Sampo bid: “ It is the board's opinion that there has not been any proposal received from DnB at this point that could have led to negotiations between DnB and Storebrand,” says the board in a communication.

Sampo is offering Storebrand’s shareholders NOK75 per share, totalling e2.6bn for the deal, which equals 31% of the manager’s average premium in the last month. Yesterday, DNB offered a sum representing 14% of Storebrand’s premium.

Today, both Sampo and Storebrand’s boards, except for two of the Norwegian board members, are recommending the international deal to the manager’s shareholders. “ It is the Board's opinion that the proposed transaction with Sampo, as it is presented in the press release issued by Sampo, is strategically sound and builds on Storebrand's existing expertise and growth strategy in the savings market,” writes Storebrand’s board.

Not everyone is convinced of the international merger, since it is Storebrand’s shareholders who decide on the matter in the end.
“ It is now up to the shareholders in Storebrand to decide what they want. We have received positive reactions to our invitation from several Storebrand shareholders,” says Svein Aaset, group chief executive at DnB.

As part of its bid, Sampo has agreed to transfer its non-life insurance arm to the Scandinavian If group, the joint insurance firm established by the merger of Storebrand and Skandia’s non-life companies in 1999. As a result, Sampo/Storebrand would own 67.5% of If, and get a lump sum of e208m for the deal.
The transfer is made on the condition that Storebrand’s shareholders agree with Sampo’s bid on the manager.

If the merger goes ahead, the companies have agreed to consolidate their subsidiaries based in Oslo and Helsinki. Asset management, and Norwegian and international life insurance would be located in Norway, while personal and investment banking, together with Finnish life insurance business would be situated in Finland.

The merger would create the sixth largest asset manager in the Nordic region, Storebrand is currently the biggest asset manager and fourth largest fund manager in Norway. Sampo is Finland’s biggest asset manager and second in fund management.
The joint business would also be the fourth largest life insurer in the area, Storebrand is currently number one in Norway and Sampo is on second place in Finland.

Together the companies have e35bn of assets under management, and Allan Åkerstedt is expected to head up asset management after the merger.
Sampo’s deal offer ends in mid-July and the integration is expected to take place at the beginning of next year.

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