Norway’s competition authority announced on Tuesday that it was extending its regulatory review of the planned sale of Danske Bank’s Norwegian personal customer business to rival bank Nordea. The decision came after the authority expressed concerns that the transaction could potentially harm customers, signaling potential roadblocks for the deal, reported Reuters.
Danske Bank, headquartered in Denmark, had initially disclosed in July its intention to sell its Norwegian personal customer and private banking business to Finland’s Nordea.
The pricing of the acquisition was to be based on “book value” when the deal becomes effective. However, the Norwegian Competition Authority’s preliminary assessment raised red flags about the potential negative impact on Norwegian bank customers.
The regulator stated in a press release, “Our preliminary assessment is that there may be reason to fear that the acquisition will impact Norwegian bank customers negatively. Going forward, the competition authority will more thoroughly consider whether there are reasons to prohibit the acquisition.”
This unexpected move by the authority has raised questions about the future of the transaction and its implications for both Danske Bank and Nordea. Danske Bank, in a response to the development, reaffirmed its expectation that the deal would still be completed by the end of 2024. Nordea also expressed its commitment to the transaction, despite the regulatory uncertainty.
Randi Marjamaa, Chief of Nordea Norway, responded to the competition authority’s decision in a statement, saying, “We take note of the Norwegian Competition Authority’s decision to further review the case and will naturally provide additional information if needed. Our view is that the Norwegian banking sector is characterized by keen competition and that Nordea is a very good solution for the customers in light of Danske Bank’s decision to exit the Norwegian market for personal customers.”
The future of the Danske Bank-Nordea deal remains uncertain, as it now hinges on the competition authority’s comprehensive assessment of the transaction.