Carnegie Acquisition: Key Details, Impact, and What Comes Next

DNB Bank ASA's acquisition of Carnegie Holding AB marks a significant move in the Nordic financial sector. This strategic transaction, valued at approximately SEK 12 billion, aims to bolster DNB's investment banking and asset management capabilities across the region. By integrating Carnegie's strengths, DNB is set to enhance its fee-based income and solidify its presence in the Nordic market.

What Is Carnegie?

Founded in 1803, Carnegie offers a range of financial services including Private Banking, Securities & Research, and Investment Banking. Its unique offerings include PB Online, which provides constant access to investments and market information, and Carnegie Edge, tailored for institutional investors with extensive analyses. Carnegie Sparkonto stands out with competitive interest rates and no fees. Additionally, Carnegie is highly ranked in Swedish equity analysis and brokerage, emphasizing sustainable growth for all stakeholders.

Who Acquired Carnegie?

DNB is a leading financial institution in Norway, offering a comprehensive range of banking services to both individual and business customers. Key products include home loans, savings accounts, insurance, and investment options. The bank also provides specialized services like mobile banking and real estate through DNB Eiendom. DNB's market influence is significant, evidenced by its role as Norway's top real estate agency and its support for 20,000 new businesses annually.

When Was Carnegie Acquired?

DNB Bank ASA announced its acquisition of Carnegie Holding AB on October 21, 2024. This move aligns with a broader trend among European banks to diversify income streams amid falling interest rates. The acquisition, expected to close in the first half of 2025, underscores DNB's strategy to enhance its presence in the Nordic region and increase fee-based income. This timing also reflects a well-considered strategic decision, following over a year of discussions with Altor to ensure a good cultural fit.

Why Was Carnegie Acquired?

• Market Expansion: The acquisition of Carnegie allows DNB to significantly enhance its presence in the Nordic region, particularly in Sweden, Denmark, and Finland. This move is expected to increase DNB's fee-related income and solidify its position in investment banking, securities brokerage, and asset management across these markets.
• Technology Integration: DNB benefits from Carnegie's advanced digital savings platform, Montrose by Carnegie, which will continue to operate independently. This integration ensures that DNB can offer innovative digital investment solutions, enhancing its service offerings and attracting a broader client base.
• Competitive Advantage: The acquisition strengthens DNB's competitive position against other Nordic and European banks. By combining resources and expertise, DNB Carnegie is poised to become a leading player in the Nordic financial sector, offering a more comprehensive range of services and improving operational efficiency.

Acquisition Terms

• Acquisition Price: Approximately SEK 12 billion (around $1.14 billion).
• Payment Method: The transaction will be an all-cash deal, subject to certain adjustments and assuming a normalized CET1 level in Carnegie at closing.
• Key Conditions or Agreements:
  • The transaction is subject to approvals from authorities in applicable jurisdictions.
  • The deal is expected to close in the first half of 2025.
  • Until regulatory approvals are obtained and the transaction closes, the businesses will continue to operate independently.
  • Any excess capital will be normalized or adjusted for in the final purchase price.
  • The transaction is expected to reduce DNB's CET1 ratio by approximately 120 basis points but will not negatively impact the distribution policy.
  • No job cuts are anticipated as part of the transaction.

Impact on Carnegie

The acquisition of Carnegie by DNB Bank ASA brings notable changes to operations and management. DNB Markets will be globally rebranded as DNB Carnegie, while Carnegie Investment Bank AB will be renamed DNB Carnegie Investment Banking AB, continuing under Tony Elofsson’s leadership. The combined entity, DNB Carnegie Holding AB, will oversee operations in Sweden, Denmark, and Finland, while integrating operations in Norway, the US, and the UK into DNB's legal structure. This strategic move aims to enhance DNB's investment banking, securities brokerage, and wealth management services across the Nordic region.

Product offerings and services are set to improve significantly. Carnegie Private Banking will be rebranded as DNB Carnegie Private Banking, enhancing wealth management services. Carnegie Fonder AB and the digital platform Montrose by Carnegie will continue to operate independently, focusing on their core strengths. Employee reactions have been positive, with Tony Elofsson and the Carnegie team expressing enthusiasm about the cultural fit and complementary strengths. Customers can expect "business as usual, but better," with improved products, services, and distribution channels. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly.