Handelsbanken submits offer to acquire Fokus Bank

Handelsbanken submits offer to acquire Fokus Bank Handelsbanken has decided to put forward the following offer to the shareholders of Fokus Bank: Handelsbanken offers NOK 70 in cash per share in Fokus Bank. The offer premium is 55 percent (compared with average closing price during the last 20 trading days). Compared with the closing price on October 29, 1998 (the last trading day prior to the announcement) the offer premium is 30 percent. The shareholders of Fokus Bank can now compare this cash offer with the exchange value of the recently proposed merger plans. The acquisition will not lead to lay-offs among the employees of Fokus Bank. All employees may continue their employment in the Handelsbanken Group.1) THE OFFER Handelsbanken offers the shareholders in Fokus Bank NOK 70 per share in cash. The value of the offer is NOK 5,088 millions. The offer is submitted to all shareholders in Fokus Bank, i.e. also those being residents outside of Norway 2). The offer is made on the following conditions, of which some or all may be waived: Handelsbanken must, at the end of the offer period, have received acceptances representing at least 90% of all the shares in Fokus Bank. Handelsbanken must be granted all approvals from public authorities necessary for the completion of the offer3). Interest compensation will be paid with 8% p.a. from the date of acceptance until the date of settlement. If Fokus Bank, before settlement has taken place, makes changes in the equity, approves of merger, demerger or other changes in the company-structure, or makes dispositions outside the scope of what is considered as normal business operations, and which are of significant importance to Handelsbanken, the offer may be cancelled. TIME SCHEDULE The Offer Document related to the offer will be available on November 4, 1998. The offer period runs up and until 4 p m on December 1, 1998. Handelsbanken reserves the right to extend the offer period. THE RATIONALE BEHIND THE ACQUISITION OF FOKUS BANK Handelsbanken considers the Norwegian market to be interesting, and now sees an opportunity to strengthen its position. Incorporating Fokus Bank, Handelsbanken will, based on total assets, constitute approx. 7% of the Norwegian market and approx. 10% of the commercial banking segment. This will strengthen Handelsbanken's opportunities to have a positive influence on the development of the Norwegian market, contributing also to a long-term improvement of the bank's profitability. Fokus Bank will be well suited for integration into the Handelsbanken Group. The operating structure in Fokus Bank is decentralised with a strong local engagement, comparable to that of Handelsbanken. The operational integration of the activities of Fokus Bank and Handelsbanken is thus expected to take place smoothly. Geographically, the two banks are largely complementary to each other; with more than 80 bank offices the combined group will have overlapping representations in only 5 cities in Norway. Expansion is expected to take place in areas lacking representation by either Fokus Bank or Handelsbanken. HANDELSBANKEN Handelsbanken is a universal bank with the Nordic region as its home market. Handelsbanken offers the whole range of banking services: traditional banking- services for the business community, capital market services as well as traditional banking-services for private customers, including life insurance. The operation of the bank is strongly decentralised. The individual branch office - which normally has the best knowledge of its customers - has the total responsibility for Handelsbanken's business engagement with the customer. Cost efficiency is highly prioritised. Handelsbanken's operations has during the whole 90s led to the a better customer satisfaction rating than the average of other banks, according to Svenskt Kundindex - a survey performed since 1989 of among others Handelshögskolan in Stockholm and Statistiska Centralbyrån. Measured by total assets, Handelsbanken is the largest commercial bank in the Nordic region. As of September 30, 1998, total assets amounted to SEK 934 billions. Currently, Handelsbanken has 480 offices in Sweden, 15 in Norway, 15 in Finland and 3 in Denmark. Additionally, there are offices in other parts of Europe, Asia and USA. Handelsbanken has 8.500 employees, and employee turnover is very low. HANDELSBANKEN IN NORWAY Handelsbanken's operations in Norway began in 1988. Through the establishment of branch offices and the acquisition of the Norwegian banks - Oslo Handelsbank, Stavanger Bank, and a part of Oslobanken - Handelsbanken currently has 15 offices and approximately 300 employees in Norway. Total assets amounts to approx. NOK 20 billions. INTEGRATION The integration between Fokus Bank and Handelsbanken in Norway is expected to be implemented along the following lines: No employee of Fokus Bank will be laid off due to over-staffing. All employees will continue their employment in the Handelsbanken Group1). Handelsbanken has so far, in modern times, never laid off employees due to over-staffing or as a result of acquisitions. Handelsbanken's operations in Norway will be managed from Oslo and Trondheim. The Norwegian operations will be divided into two regional banks, with respective regional headquarters in these two cities, in parallel with the structure in Sweden, where the operation is divided into seven regions, each with a regional headquarter. SYNERGIES ARE EXPECTED ACHIEVED BASED ON THE FOLLOWING FACTORS: The international network and competence of Handelsbanken's current operations will benefit the operations of the Fokus Bank bank-offices and their customers. The bank-offices of Fokus Bank will, through the financial strength of Handelsbanken, be able to engage in significantly larger business engagements than what it is currently capable of. Over a period of time, the integration of Fokus Bank into the Handelsbanken Group will enable cost reductions. These are expected mainly to derive from the elimination of redundant functions, in addition to the implementation of Handelsbanken's cost-efficiency which will further increase the profitability of Fokus Bank's operations. EFFECTS ON THE PROFITABILITY OF THE HANDELSBANKEN GROUP The immediate effect of the acquisition of Fokus Bank is an increase in profit before tax calculated to approx. SEK 100 millions. Only interest costs and goodwill depreciation are taken into account in this calculation by Handelsbanken; the effects of other cost or income items expected to follow as a result of the acquisition are not included. Over a five-year period, Handelsbanken expects to realise effectiveness gains in the combined operation amounting to approximately SEK 200 millions per year. As of September 30, 1998, Handelsbanken's total assets amounted to SEK 934 billions. Including Fokus Bank, the total assets would have been approx. SEK 975 billions, an increase of approx. 5 percent. The increase in Handelsbanken's annual profits after five years are estimated to approx. SEK 300 millions, or SEK 0,75 per share. FURTHER INFORMATION IS AVAILABLE FROM: Arne Mårtensson, President and Group Chief Executive, tel: (+46) 8 22 92 20 Bjørn-Åke Wilsenius, Head of Regional Bank Norway, tel: (+47) 22 94 08 70 Lars Lindmark, Head of Corporate Communications Department, tel: (+46) 8 22 92 20 Gustaf Elmstedt, Head of Investor Relations, tel: (+46) 8 701 5142 In accordance with practice, however, a limited number of leading employees will be exempted. Does not apply for potential shareholders resident in Canada, Japan and Australia. Handelsbanken must, within May 31, 1999, have been granted the concession from the Norwegian Ministry of Finance and the approval from the Swedish Finansinspektionen necessary for the completion of the acquisition, both on terms acceptable to Handelsbanken. If such approvals have not been granted within May 31, 1999, Handelsbanken will not be bound to complete the acquisition. Handelsbanken may extend the period necessary to receive such approvals. The seller will then be bound by his acceptance, however not beyond August 31, 1999. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are ready for download: http://www.bit.se/bitonline/1998/10/30/19981030BIT00030/bit0001.doc