Nordic financial services companies Nordea and DNB have signed an agreement to jointly divest 60% stake of Baltic bank Luminor to a consortium led by private equity funds managed by Blackstone for €1bn.
The divestment forms a part of Nordea’s strategy to focus on core Nordic markets.
Luminor was created last year by combining Nordea’s and DNB’s Baltic operations. Currently, it holds 23% lending market with €15bn of assets.
Led by Erkki Raasuke, the bank has 64 branches across Estonia, Latvia, and Lithuania.
Nordea personal banking head Topi Manner said: “The sale is the natural next step following the establishment of Luminor in 2017 whereby Nordea and DNB created the third largest bank in the region – a strong stand-alone bank.
“With this transaction we are able to further consolidate our focus and efforts towards our core Nordic markets, and it allows us to redeploy capital into those Nordic markets over the coming years.”
Following the completion of the Luminor transaction, Nordea and DNB will continue to hold 20% stake each in Luminor and maintain ongoing representation at its Board of Directors.
Blackstone senior managing director Nadim El Gabbani said: “Erkki Raasuke leads a tremendously talented management team with an outstanding track record of delivering service to customers and value to shareholders.
“We believe that Luminor is well positioned to continue to lead the market as an independent provider of financial services. We are excited by the partnership with management, Nordea and DNB and look forward to working together to create a stronger platform for further growth.”
The Luminor transaction is expected close in the first half of 2019, subject to local and international regulatory approvals.
Separately, Nordea has entered into another agreement with Blackstone to sell its remaining 20% stake over the coming years.