COPENHAGEN (Reuters) – Danske Bank (DANSKE.CO) has decided to buy the Danish pension assets of Sweden’s SEB (SEBa.ST) in a $1 billion deal to create Denmark’s largest commercial pension fund.
Danske Bank said the purchase would bring its market share to 19.2 percent, surpassing the current market leader PFA.
According to figures from lobby group Insurance & Pension, Danske Bank’s pension unit Danica Pension had a market share of 13.4 percent in 2016.
Under the deal, which still needs approval from the authorities, Danske Bank will pay 5 billion Danish crowns ($795 million) in cash for the assets after SEB has paid itself 1.5 billion crowns in dividend.
“This makes good strategic sense for Danske. The larger you are, the more administrative costs you can cut off, and the more money you can make,” analyst Ricky Rasmussen of Nykredit said, adding that the price seemed “fair.”
The SEB unit has around 275 employees, more than 100 billion crowns under management and around 200,000 customers.
Danske Bank’s pension unit Danica Pension had a market share of 13.4 percent in 2016, according to Insurance & Pension.
Danske expects final approval in the first half of 2018.