Unidanmark and MeritaNordbanken agree to merge

Unidanmark and MeritaNordbanken agree to merge * The leading financial services group in the Nordic and Baltic region, listed in Copenhagen, Helsinki and Stockholm, created by the merger of Unidanmark and MeritaNordbanken. Market capitalisation of EUR 15.6 billion, 9 million customers and an excellent base for a rapid growth of electronic financial services * Annual pre-tax synergies of EUR 200 million to be realised within three years and substantial second phase synergies * Merger by way of share exchange offer to give Unidanmark shareholders 30 per cent and MeritaNordbanken shareholders 70 per cent of the New Group as 12.704 shares of MeritaNordbanken's parent company, Nordic Baltic Holding, are offered for each Unidanmark share. Special dividend of DKK 10 per Unidanmark share subject to the completion of the exchange offer * Nordic Baltic Holding to propose 10 per cent share buy-back programme in the New Group and remaining Unidanmark share buy-back programme to be cancelled * Vesa Vainio, Chairman, Hans Dalborg, Group CEO and Thorleif Krarup, Deputy Group CEO, to succeed Hans Dalborg in January 2001. Dalborg becomes Vice Chairman in 2001 and will be proposed Chairman in 2002. The new Board of Directors will decide upon an incentive programme * Agreement backed by unanimous Boards of Directors and the Unidanmark Trust and supported by Nordic Baltic Holding's largest shareholder, the Swedish state Excellent fit of leading market positions and competencies The New Group will combine MeritaNordbanken's strong position in the Swedish, Finnish and Baltic markets and leading Internet financial services with Unidanmark's strong market position in Denmark and its competencies within wholesale banking, insurance and bancassurance. * The largest financial services group in the region with approximately EUR 186 billion in total assets and a combined market capitalisation of EUR 15.6 billion * A world-leading Internet banking and e-commerce operation with 1.4 million customers * Significant positions in Nordic banking markets: 40 per cent in Finland, 25 per cent in Denmark and 20 per cent in Sweden * Significant positions in Nordic insurance markets. Life insurance: Finland 30 per cent, Denmark 10 per cent, Norway 5 per cent and Sweden 6 per cent. Non-life insurance: Denmark 22 per cent and Norway 19 per cent * The largest customer base of any financial services group in the region including 8.5 million personal customers, 450,000 small and medium-sized corporate customers and 500 large corporate customers * A leading asset manager in the Nordic financial market with EUR 100 billion (including private banking) under management * The most comprehensive distribution network in the region including 1,100 bank branch offices, 125 insurance service centres and leading telephone and Internet services The Nordic parent company, legally domiciled in Sweden, with group functions and competence centres in Copenhagen, Helsinki and Stockholm will seek listing on the Copenhagen Stock Exchange, in addition to listings in Helsinki and Stockholm. Chairman and Group CEO According to previous plans Vesa Vainio will succeed Jacob Palmstierna as Chairman when Jacob Palmstierna leaves the Board of Nordic Baltic Holding. The following Board and top management composition has been agreed upon: * 2000: Chairman Vesa Vainio, Vice Chairman Jørgen Høeg Pedersen, Group CEO Hans Dalborg and Deputy Group CEO Thorleif Krarup * 2001: Group CEO Thorleif Krarup and new Vice Chairman Hans Dalborg * 2002: Chairman Hans Dalborg Boards of Directors recommend share exchange offer The merger will be effected by a share exchange offer from Nordic Baltic Holding to the shareholders of Unidanmark recommended by both Boards of Directors. The shareholders of Unidanmark are offered to exchange each Class A and B share in Unidanmark for 12.704 new shares in Nordic Baltic Holding. The exchange ratio reflects a share of ownership in the New Group of 30 per cent for Unidanmark shareholders and 70 per cent for Nordic Baltic Holding shareholders. The exchange offer commences on 6 March 2000 and expires on 12 April 2000 at 16:00 Copenhagen time. The Board of Directors of Nordic Baltic Holding will propose to its shareholders that it be given a mandate to repurchase up to 10 per cent of its shares, based on the total number of shares outstanding following the exchange offer. The Board of Directors of Unidanmark has decided not to complete its previously announced repurchase programme. To date it has repurchased 1,432,911 shares, which will be cancelled at Unidanmark's annual general meeting. The current Boards of Directors of Nordic Baltic Holding and Unidanmark recommend the merger to their respective shareholders. The Board of Directors of Tryg-Baltica smba proposes that the Board of Representatives of Tryg-Baltica smba accepts the share exchange offer and the Board of the Unidanmark Trust has decided to accept the offer conditional upon regulatory approvals. Nordic Baltic Holding's largest shareholder, the Swedish state, supports the merger. Background and rationale The financial services industry is undergoing rapid structural developments that fundamentally change the way financial institutions produce, market and sell financial products and services. These important market developments include: * The increasing importance of the Internet, mobile telephony and e- commerce demands investments and requires larger transaction volumes * The Single European Market, the creation of the euro and the liberalisation of credit and capital markets lead to vastly increased competition * Corporate customers grow through mergers and demand banks with a larger capital base * The global equity market demands larger market cap banks with good share liquidity * The elimination of previously distinct borders between banking, asset management and insurance products as well as between geographic markets The Boards are convinced that the calculated synergies will be realised and within the expected time frame: * The vision, strategy and goals for the New Group are shared by a broadly based part of managers in the two organisations * Agreement has been reached in harmony as to the composition of the Board, corporate governance principles, organisational format and distribution of responsibilities * MeritaNordbanken has unique and positive experience from merging two banking organisations from different Nordic countries and Unidanmark has a recent positive experience of merging banking and insurance Business focus The New Group will offer all major financial services to personal customers, corporate and institutional customers and the public sector in its home region. Corporate and institutional customers will be serviced outside their home countries through the group's international units and partners. In addition, certain asset management products will be offered to selected international institutional customers. Private banking services will be offered to high net worth individuals in selected European countries. Electronic financial services, especially Internet banking, will be a key growth area of the group, which aims to be the leader in the development of new Internet financial services and in terms of penetration in the Nordic and Baltic area. - At the formation of MeritaNordbanken, as a first step in creating a truly regional financial services group, we issued an open and friendly invitation for co-operation to build the best and the largest financial group in the Nordic and Baltic region. Today's merger with Unidanmark is a decisive step in harmony with this vision of increased value creation for customers, shareholders and employees, says Jacob Palmstierna, Chairman of Nordic Baltic Holding. - Over the years Unidanmark has pursued a very focused Nordic growth strategy to increase competitiveness and build long-term shareholder value. The proposed merger with MeritaNordbanken is the next logical step in this strategy, says Jørgen Høeg Pedersen, Chairman of Unidanmark and proposed Vice Chairman of the New Group. - Our customers operate on a regional basis and so must we. For all our countries, Nordic and Baltic co-operation creates value for private citizens, corporations and society. I am glad we have been able to agree smoothly on strategic issues and the distribution of value between shareholders to form this new group, says Vesa Vainio, Deputy Chairman of Nordic Baltic Holding and proposed Chairman of the New Group. The merging parties together reiterate the prolonged MeritaNordbanken offer to the shareholders of Christiania Bank og Kreditkasse ASA with the aim of enabling Christiania Bank to become a partner in the new Nordic and Baltic financial services group. Pro forma financial information The following combined pro forma information for the New Group is based on audited accounts for the year ended 31 December 1999. For accounting purposes the purchase method of accounting will be used when combining MeritaNordbanken and Unidanmark. The pro forma information is calculated as if the merger came into effect as at end-December 1999, but does not take into account future goodwill amortisation and synergy benefits. The merger is expected to result in restructuring costs of EUR 200 million before tax and goodwill of slightly less than EUR 900 million as a direct consequence of the merger. These items have been included in the combined pro forma balance sheet data for illustration purposes, and will be included in the accounts at the day of the final approval of the merger. Goodwill will be amortised on a straight-line basis over a period of 20 years. More detailed pro forma profit and loss accounts and balance sheets will be presented in the forthcoming listing prospectus. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/03/06/20000306BIT00040/bit0001.doc http://www.bit.se/bitonline/2000/03/06/20000306BIT00040/bit0002.pdf