STOCKHOLM (Reuters) -Norway's largest bank DNB has agreed to buy Swedish investment bank and asset manager Carnegie from private equity firm Altor and minority owners for around 12 billion Swedish crowns ($1.14 billion), it said on Monday.
The acquisition is set to enhance DNB's presence in the Nordic region and increase its fee-based income, Chief Financial Officer Ida Lerner told Reuters.
"This is in all essence, an income synergy case. We see a significant potential in terms of income generation going forward," she said. "There's always an element in terms of cost synergies, but that's very, very minor in this case," Lerner said.
She said no job cuts were anticipated in relation to the transaction.
DNB said in a statement it expected to finalise the all-cash acquisition, which is subject to official approvals, in the first half of 2025.
DNB had been in dialogue with Altor for a bit more than a year, seeking to ensure that the businesses complemented each other and were a good fit, culturally, Lerner said.
"This is a know-how business. It's really a people's business," she said.
Shares in DNB rose 0.7% at 0957 GMT.
While Europe's biggest banks have bolstered their resilience since the 2008-2009 financial crisis, longer-term earnings growth could come under pressure again as interest rates fall.
Some lenders have already turned to deal-making to diversify their income. BNP Paribas (OTC:BNPQY) is buying AXA Investment Managers, while UniCredit built a stake in Germany's Commerzbank (ETR:CBKG).
Carnegie, which employs around 850 people, had 436 billion crowns in assets under management as of Sept. 30.
DNB said it expects the deal to generate a return on invested capital above 15%, and increase efficiency across the combined operations.
"The primary value driver of the transaction is the growth opportunities unlocked by a stronger combined Nordic platform and enhanced client offering," it said in a statement.
DNB said DNB Markets and Morgan Stanley were acting as its financial advisors, while Carnegie Investment Bank, Goldman Sachs and Lenner & Partners acted as advisors to Carnegie.
DNB is due to report quarterly results on Tuesday. European rivals Deutsche Bank, Lloyds (LON:LLOY) and Barclays will also report this week.
The Nordic financial sector has seen relatively few acquisitions in recent years. Nordea expects to finalise a deal this year to buy the Norwegian personal customer and private banking business of Danske Bank.
Handelsbanken last year agreed to sell parts of its Finnish operations to local firms for 1.3 billion euros ($1.41 billion).
DNB said it would, in connection with the acquisition of Carnegie, rename its DNB Markets unit DNB Carnegie.
($1 = 10.5308 Swedish crowns)
($1 = 0.9214 euros)