Merger Update
September 19 2001 - 10:33AM
UK Regulatory
RNS Number:2426K
Skandinaviska Enskilda Banken
19 September 2001
ForeningsSparbanken and SEB break off merger
ForeningsSparbanken and SEB have today withdrawn the notification to the
European Commission concerning the planned merger between the banks. Through the
decision the merger process between the banks is discontinued.
The Boards of Directors of both banks have unanimously made this decision, since
they have established that an approval of the planned merger by the European
Commission implies such extensive concessions that the value of the merger would
be lost through, among other things, a lack of synergies.
From the objections to the planned merger that the Competition Authority has
expressed in its Statement of Objections of 11 September and the subsequent
discussions between the banks and the authority, is it evident that the banks
and the Commission have strongly diverging standpoints. In order for the merger
to obtain approval, far more extensive concessions will be demanded than the
banks are prepared to make. It would, among other things, be necessary to
dispose of a considerable part of the office network, possibly including product
concessions, and thus a very large number of customers and employees.
Concessions to such an extent mean that the value of the merger would be lost.
"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 Goran Collert,
Chairman of the Board of ForeningsSparbanken. "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."
"The European Commission and the banks have different views of the Swedish bank
market," says Jacob Wallenberg, Chairman of the Board of SEB. "In its Statement
of Objections the Commission claims that the new bank would gain such a dominant
position that not even Nordea and Svenska Handelsbanken would be able to compete
with us. We do not share that opinion. In our view competition is tough and
constantly growing as new actors enter the market. This is shown not least by
the fact that the prices in the banking sector are lower in Sweden than in the
rest of Europe. We regret that the conditions to create a large European bank
from a Swedish basis no longer exist as the synergies would be lost through
concessions."
In the light of this the Boards of Directors of ForeningsSparbanken and SEB have
decided to withdraw their notification to the European Commission. The banks
choose to individually seek other ways to develop the respective bank.
ForeningsSparbanken AB (publ) Skandinaviska Enskilda Banken AB (publ)
Board of Directors Board of Directors
A press conference will be held on Wednesday 19 September 2001, at 10.30 am at
Strindbergssalen, Berns, Stockholm.
Contacts ForeningsSparbanken
Staffan Salen, Executive VP and
Head of Information and Investor Relations
+ 46 (0)8 585 927 79
+ 46 (0)70-531 01 11
Jesper Berggren, Press Officer
+ 46 (0)8-585 924 78
+ 46(0)70-549 37 67
Contacts SEB
Gunilla Wikman,
Head of Group Communications
+ 46(0)8-763 81 25
+ 46(0)70-763 81 25
Boo Ehlin, Press Officer
+ 46(0)8-763 85 77
+ 46(0)70-763 85 77
Lotta Treschow,
Head of Investor Relations
+ 46(0)8-763 95 59
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