SpareBank 1 SR-Bank ASA (SRBANK); SpareBank 1 Gruppen and DNB sign letter of intent relating to insurance merger
SpareBank 1 Gruppen AS and DNB ASA on June 20th signed a letter of intent relating to the merger of their insurance businesses, which will create one of the biggest insurance companies in the country.
The new insurance company will result from the merger of SpareBank 1 Forsikring with DNB Forsikring AS. The merged company will have a virtually complete risk insurance product portfolio aimed at the personal and SME markets. The issue of whether to transfer some personal risk insurance policies to the new company is currently under consideration.
The new company will remain a subsidiary of SpareBank 1 Gruppen AS, which is going to have a stake equivalent to 60 per cent in the new company. DNB will own the residual 40 per cent.. The letter of intent sets out a conversion ratio of around 80 per cent for SpareBank 1 Gruppen and around 20 per cent for DNB. This conversion ratio is based on the market value of the two insurance companies. Moreover, the market value applies when DNB increases its ownership to 40 per cent
At the time when the merger is completed, the new company will have a market share in risk insurance of more than 15 per cent, rendering it the third largest insurance firm in Norway, and the largest in the country to have its products distributed through banks.
The new company will continue SpareBank 1’s agreement to supply products to the 930,000 members of the Norwegian Confederation of Trade Unions (LO) through the LOfavør brand. Furthermore, the SpareBank 1 banks will distribute insurance policies under the SpareBank 1 brand, whereas DNB’s distribution of insurance policies are to occur under the DNB brand.
Together with DNB, SpareBank 1 may now be able to boost its distribution of insurance products and services through banks. The new company will have greater power to further develop innovative and customer-friendly solutions, and their time to market is set to decrease.
The merger is scheduled for completion on January 1st 2019, subject to approval from the Norwegian authorities.
SpareBank 1 SR-Bank ASA holds 19,5 % of the outstanding shares of SpareBank 1 Gruppen AS.
Stavanger, 20 June 2018
Contact people:
Arne Austreid, CEO, Tel. +47 900 77 334
Inge Reinertsen, CFO, Tel. +47 909 95 033
Stian Helgøy, Vice President Investor Relations, Tel. +47 906 52 173
Thor-Christian Haugland, Executive Vice President Communications, Tel. +47 480 31 633