Kaupthing Bank hf. (Kaupthing) and the consortium of shareholders of NIBC Holding NV have entered into an agreement to purchase the entire share capital of NIBC Holding NV (NIBC) for approximately €2,985 million. The excellent strategic fit between the two companies will further enhance NIBC's ability to provide integrated financial solutions to its clients.
Kaupthing is a European bank that operates in ten countries, including all the Nordic countries, Luxembourg, Switzerland, the UK and the US. In addition, the bank operates a retail franchise in Iceland, where it is headquartered. Kaupthing offers integrated financial services to companies, institutional investors and high net worth individuals. These services include corporate banking, investment banking, capital markets services, treasury services and asset management and comprehensive wealth management for private banking clients. Based on Kaupthing's market capitalisation of €9.2 billion as of 10 August 2007, the bank is currently the seventh largest in the Nordic region. Kaupthing's shares are listed on the OMX Nordic Exchange in Iceland and Sweden.
The combined group will benefit from Kaupthing's and NIBC's strong complementary fit in terms of strategy, product offerings and business culture. Besides this, the combined group will have a larger capital base and improved access to funding. The aim is to integrate NIBC into Kaupthing Group and to create a stronger, more diverse organisation. As part of the integration, NIBC's employees will be offered stock options in Kaupthing in accordance with the bank's policy of offering all employees of the group to become shareholders. Kaupthing intends to fully integrate NIBC into its operations, while building on NIBC's considerable franchise value and brand name in its markets.
As part of the terms of the transaction, NIBC's US sub-prime portfolio will be transferred prior to the completion to a company controlled by the Sellers.
On Wednesday 15 August 2007, NIBC will provide its full 2007 half year results, ahead of the scheduled reporting date of August 24, 2007.
Michael Enthoven, Chairman of the Managing Board of NIBC: "We look forward to this transaction as it offers many new opportunities to our clients and employees. There is a strong strategic and business fit between the two companies. This will strengthen our origination capabilities and enlarge our global distribution network. Kaupthing's management has a proven track record of successfully integrating new companies into the group and we are confident about their capacity to carry out the acquisition and integration of NIBC to the highest standards. This is good news for our customers and employees. Together NIBC and Kaupthing will be stronger!"
Hreidar Már Sigurdsson, Chief Executive Officer of Kaupthing Bank: "The proposed acquisition is a natural next step in Kaupthing's strategy of growth and diversification. NIBC is an excellent bank that we have followed for many years. It has a strong product offering in its home market, an attractive operating performance from its core operations and strong distribution capabilities. Both Kaupthing and NIBC have similar business models targeted at providing the full range of financial solutions to SMEs and affluent individuals, and the two businesses are complementary in terms of strategy and geographic spread. This is a great deal for Kaupthing and we all look forward to entering the exciting new markets."
Regulatory approval
The deal is subject to the approval of the relevant regulatory authorities. These approvals are expected in the fourth quarter of 2007.
Completion
This acquisition is expected to be completed around the end of this year.
Source: NIBC
