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UPDATE 3-Sweden's Nordea stake sale tests takeover waters
February 4, 2011 / 9:33 AM / in 7 years

UPDATE 3-Sweden's Nordea stake sale tests takeover waters

* Sweden sells 6.3 pct stake in Nordea for 19 bln SEK

* Sale price 74.5 crowns

* Nordea shares down 3 percent at 76 crowns

* Top shareholder Sampo intends to get 22-23 pct stake

(updates with Sampo, analyst comment)

By Johan Ahlander and Victoria Howley

STOCKHOLM/LONDON, Feb 4 (Reuters) - Sweden raised $2.95 billion by selling a 6.3 percent stake in Nordea (NDA.ST) on Friday and plans to sell more in the future, testing industry appetite for bank consolidation in the Nordics.

Nordea, the region’s biggest bank, has long been seen as hungry for assets as it looks for scale and to cut costs, with rival Swedbank (SWEDa.ST) the most likely target.

Getting the government -- keen to see more not less competition in the market -- off the shareholder book should help Nordea be more aggressive in looking for deals.

Nordea’s biggest owner, Sampo SAMAS.HE, is keen on pushing consolidation, though the Finnish insurer does not have the financial muscle to buy Nordea itself.

Sampo upped its holding to 21.3 percent from 20.6 percent in Friday’s sale and Chief Executive Kari Stadigh told Reuters he was targeting a stake of 22-23 percent. [ID:nWEB6955].

Nevertheless a Nordic banking marriage may be far off.

“My personal view is that domestic consolidation is quite a difficult thing structurally to push through,” said Nick Davey, an analyst at UBS.

Davey said competition authorities would probably not approve a Swedbank-Nordea merger as the new bank would have too big a share of the retail market. Selling off assets would reduce synergy benefits.

The European Union nixed a deal between Swedbank and SEB SEB.ST in 2001 on competition grounds.

Furthermore, banks are currently preoccupied with keeping up with new bank rules on capital and liquidity.

Nordea’s chief financial officer told Reuters in December that big Nordic bank mergers were off the table until details of sweeping new banking regulations called Basel III emerged.

Concentrating risk in bigger banks may also argue against mergers in the post-crisis world.

“Look at the balance sheet of Nordea, it’s probably double the size of Swedish GDP,” said one analyst who declined to be named. “If you add up the four banks, it’s about 350 pct of Swedish GDP. Think of Ireland.”


Sweden said it had sold 255 million shares in Nordea at 74.5 crowns each, a total of 19 billion crowns ($2.95 billion) and a five percent discount to the stock’s closing price on Thursday.

The sale of the stake cuts the government’s holding in the Nordic region’s biggest bank to 13.5 percent with more .

Shares in Nordea were trading at 74.50 crowns at 1410 GMT, down 5 percent on the day and underperforming a 1.5 percent decline in the Nordic banking sector .TBNKF.

Earlier this week Nordea posted a quarterly profit of over 1 billion euros ($1.36 billion) for the first time ever, pushing its shares to a near three-year high.

The centre-right alliance has made privatisation a key platform. After selling some shares in telecoms group TeliaSonera TLSN.ST, real estate firm Vasakronan and Absolut vodka-maker Vin & Sprit in its first mandate period, it plans to a further 100 billion crowns of assets over the next four years.

The opposition backed its plan to sell Nordea, but has objected to the sale of stakes in TeliaSonera TLSN.ST, mortgage firm SSAB [SSAB.UL] and power company Vattenfall [VATN.UL].

Sweden plans to use privatisation revenues to pay down debt.

Additional reporting by Anna Ringstrom and Mia Shanley in Stockholm; Writing by Simon Johnson; Editing by Dan Lalor and Andrew Callus $1 = 6.445 Swedish crowns

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