Saxo Bank is gearing up to acquire BinckBank in a $480 million deal as it aims to expand in the online trading and investment markets.
Reuters, citing Saxo Chief Executive Officer Kim Fournais, reported the deal is being prompted by the need for traditional banks to push back against FinTech startups, new payment companies and large internet companies like Amazon, which are getting into the payments industry.
“It’s an arms race developing unique technology, better mobile platforms and cheaper and more diverse products,” Fournais, who owns 26 percent of Saxo, said in an interview with Reuters.
Saxo gets most of its income from its online trading business, in which it makes trading platforms for foreign exchange traders. The CEO told Reuters that the deal gives it access to BinckBank's customers, but that it will be cheaper to migrate customers to its platform than to BinckBank's.
“Migrating customers onto our platform solves part of the problem,” the executive told Reuters, noting that Saxo is aiming to add BinckBank's 630,000 customers to the nearly 200,000 that already use the Saxo platform. The goal, said Fournais in the report, is to have more than one million users in 2019. The executive noted that more consolidation is coming to the online trading market, thanks in part to pressures on commissions and negative interest rates. There's also the likelihood of new competition coming down the pike.
Under the terms of the deal, Reuters reported that Saxo Bank will pay 6.35 euros per share, which marks a 35 percent premium to the closing price of BinckBank's stock on Friday (Dec. 14). The deal is being bankrolled by a combination of equity injections via Saxo Bank's shareholders and via cash. Reuters noted that shareholders of BinckBank will have to vote for or against the deal in an extraordinary general meeting. The companies expect the deal to close in the third quarter of 2019.