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Nordea Bank and JSB “ORGRESBANK” have signed an agreement on Nordea Bank acquisition of 75.01% of capital of JSB “ORGRESBANK,” Moscow, while the total value of this deal amounted to USD 313.7 mln. (EUR 246 mln.). After the finalization of the deal, the remaining 24.99% shall belong in equal shares to the group of Orgresbank top-managers and to the European Bank of Reconstruction and Development, which shall acquire new shares after additional issue for the amount of USD 43.7 mln. The new partnership shall allow the parties to join their efforts in reaching higher growth levels, taking into account the potential of the corporate and retail segments of the Russian market. The deal shall also allow Nordea Bank to broaden and strengthen its base for servicing Scandinavian customers, who conduct business in Russia, and shall provide additional opportunities for existing customers and Orgresbank staff.
This transaction is subject to approval by relevant regulative authorities. The finalization of the deal is expected by the end of 1Q07. This event is not expected to significantly affect the Nordea Bank dividend yield.
In addition to the signed agreement on acquisition of control stake in Orgresbank, Nordea Bank and Orgresbank signed an agreement on providing the subordinated loan in the amount of USD 30 mln., and have expressed a settled intention to increase the capital of Orgresbank in order to support the development plans. The Bank shall target the fast growing markets of Moscow and St. Petersburg, as well as broaden its branch network in order to ensure its presence in the most economically developed regions of Russia.
“The present deal provides Nordea Bank with an opportunity to use the advantages of Orgresbank branch network and thereby to conquer corporate and retail segments of the Russian banking market. Orgresbank strategy and strong team of managers form a fine combination along with Nordea Bank ambitious plans for Russia. The deal shall allow Orgresbank to broaden its product line and provide Nordea Bank experts developed, most up to date banking products in the area of mortgages, consumer loans, private banking, accounts management, internet banking, capital markets,” - says Tom Ruud, the Member of the Board, Head of the Corporate Business and Financial Institutions Division of Nordea Bank.
Igor Kogan, the Chairman of the Board of the JSB “ORGRESBANK” adds: “We are pleased to partner up with such a strong financial institute. Orgresbank will retain the current team, which has been successfully developing the Bank up to the present time. We managed competition with the largest Russian banks due to constant innovations, entrepreneurial spirit and focus on customer. We shall become more competitive due to this partnership. Leading western expertise and knowledge base of Nordea pared with our experience and proficiency in the Russian market shall allow us to considerably improve the effectiveness of the development strategy implementation and upgrade our services.”
Credit Suisse Bank acts as an investment consultant for Nordea Bank, Finpoint Company – as an investment consultant for Orgresbank.