DNB Markets, the bank’s brokerage division, will be renamed DNB Carnegie as part of the acquisition.
Seafood lending giant DNB has entered into an agreement to acquire all shares in Carnegie Holding from private equity firm Altor and other minority shareholders for approximately SEK 12 billion ($1.05 billion). The deal is a strategic move for DNB to expand its presence in the Nordic market and boost fee-based income. The transaction is subject to regulatory approvals in multiple jurisdictions and is expected to close in the first half of 2025.
Carnegie Holding AB is the parent company of Carnegie Group, a leading Nordic investment bank and asset manager with 850 employees. The group generates 56% of its revenues from investment services and 44% from asset management.
“The aim of acquiring Carnegie is to offer even better solutions to our clients. Together with Carnegie, we are putting real force behind our ambition to become a leading Nordic player in investment banking, securities brokerage and analysis, corporate banking, private banking, and asset management. Carnegie is a perfect match, in line with our strategy, and the acquisition represents a step change in our goal of increasing the share of fee income within DNB as a whole,” said Kjerstin Braathen, CEO of DNB, in a stock exchange update on Monday.
Following the acquisition, DNB Markets will be rebranded as DNB Carnegie.
Strengthening Nordic Market Position
Carnegie CEO Tony Elofsson said DNB is the ideal partner to advance Carnegie as part of a larger financial institution. He noted that the merger will enable Carnegie to better serve its Nordic clients with a broader product range while preserving its entrepreneurial spirit and customer-centric approach.
“For us, DNB is the perfect partner to take Carnegie forward as part of a larger financial group. The merger of Carnegie and DNB Markets into DNB Carnegie will enable us to serve our Nordic clients with an expanded offering, while preserving our entrepreneurial spirit and client-centric approach,” Elofsson said.
DNB Carnegie’s investment services and private banking operations in Sweden, Denmark, and Finland will primarily operate through Carnegie Investment Bank AB, which will be renamed DNB Carnegie Investment Banking AB and will continue under the leadership of Elofsson.
Linking Nordic and International Markets
DNB Carnegie aims to strengthen its position in investment banking, securities brokerage, and analysis across key sectors in the Nordic region, while also expanding its client offering internationally. The acquisition enhances scalability, leveraging DNB’s global network with offices in London, New York, and Singapore.
“The transaction will provide greater scalability, and our combined resources and solid sector knowledge, together with our global network and offerings, will help us create even more value for our clients. I look forward to welcoming Carnegie to DNB,” said Alexander Opstad, Head of DNB Markets.
“The businesses complement each other very well, both geographically and in terms of industry knowledge and products. With a combined presence in Norway, Sweden, Finland, and Denmark, and offices in London, New York, and Singapore, we will be able to better connect Nordic and international markets,” Opstad added.
Enhancing Wealth Management
DNB Wealth Management already holds a strong position in Norway in asset management, private banking, pensions, and savings. Carnegie’s established brand and track record in this segment, particularly in Sweden and other Nordic markets, will create new opportunities for the combined wealth management business.
“This transaction strengthens our wealth management offering across the Nordic region, allowing the business to grow further. Our products, services, and distribution channels, which are already among the best in the market, will be even better after the transaction, benefiting our clients. Together, we will be better positioned to meet and exceed the expectations of both new and existing clients,” said Håkon Hansen, Head of DNB Wealth Management.
Financial Impact
Carnegie reported SEK 436 billion ($38 billion) in assets under management as of September 30, 2024, with a year-to-date net income of SEK 535 million ($47 million) and a return on equity of 18%. The acquisition is expected to contribute over SEK 1 billion ($88 million) annually to DNB’s net income starting in 2025, corresponding to a price-to-earnings ratio of approximately 12x.
The transaction is anticipated to boost DNB’s earnings per share and return on equity, generating over a 15% return on invested capital. The main value driver for the deal is the growth potential unlocked by a stronger combined Nordic platform and enhanced client offerings. Efficiency gains across the combined businesses are also expected.
As of Q2 2024, DNB reported a common equity tier 1 (CET1) capital ratio of 19.0%, well above the regulatory requirement of 15.6%. The acquisition is expected to reduce DNB’s CET1 ratio by approximately 1.20 percentage points, but will not negatively impact the bank’s dividend policy.
Advisors and Investor Meeting
DNB Markets and Morgan Stanley served as financial advisors, while Mannheimer Swartling acted as legal counsel to DNB.
Investors and analysts are invited to participate in a digital meeting at 11:15 AM to discuss the transaction, with an opportunity to ask questions. The meeting will be conducted in English.
