FöreningsSparbanken and SEB scrap merger plans
SWEDEN – Swedish banks FöreningsSparbanken and SEB have scrapped merger plans following intervention by the European Commission’s (EC) competition authority, citing a lack in value for the merger under EC conditions for the fusion.
The Boards of directors of both banks announced that the EC’s intervention implied such extensive concessions that the benefits of the merger, such as greater synergy of the two groups, would be lost.
The banks noted that, among other things, the EC’s conditions would oblige the firms to dispose of a considerable part of their office network and possibly offer product concessions, impacting on a large number of customers and employees.
"Our intention was to create value for customers, personnel, shareholders and thereby also for the society, and at the same time create the conditions to take a strong step into the pan-European banking market," says Göran Collert, Chairman of the Board of FöreningsSparbanken.
He adds: "The rules of the EU focus on static market shares and do not take into consideration the dynamics of the market. To divest a large number of customers and personnel in order to reduce market shares, as the Commission requests, is not in line with the vision behind the merger, namely to create value for all concerned parties. The rationale of the merger is still valid, but the EU regulation and its application make it impossible for us to carry through the deal. It calls for reflection that small member states with small populations do not have the same possibility to create effective units as the large European countries do."