FöreningsSparbanken and SEB have today withdrawn the notification to the European Commission concerning the planned merger between the banks. Through the decision the merger process between the banks is discontinued.
The Boards of Directors of both banks have unanimously made this decision, since they have established that an approval of the planned merger by the European Commission implies such extensive concessions that the value of the merger would be lost through, among other things, a lack of synergies.
From the objections to the planned merger that the Competition Authority has expressed in its Statement of Objections of 11 September and the subsequent discussions between the banks and the authority, is it evident that the banks and the Commission have strongly diverging standpoints. In order for the merger to obtain approval, far more extensive concessions will be demanded than the banks are prepared to make. It would, among other things, be necessary to dispose of a considerable part of the office network, possibly including product concessions, and thus a very large number of customers and employees. Concessions to such an extent mean that the value of the merger would be lost.
"Our intention was to create value for customers, personnel, shareholders and thereby also for the society, and at the same time create the conditions to take a strong step into the pan-European banking market," says Göran Collert, Chairman of the Board of FöreningsSparbanken. "The rules of the EU focus on static market shares and do not take into consideration the dynamics of the market. To divest a large number of customers and personnel in order to reduce market shares, as the Commission requests, is not in line with the vision behind the merger, namely to create value for all concerned parties. The rationale of the merger is still valid, but the EU regulation and its application make it impossible for us to carry through the deal. It calls for reflection that small member states with small populations do not have the same possibility to create effective units as the large European countries do."
"The European Commission and the banks have different views of the Swedish bank market," says Jacob Wallenberg, Chairman of the Board of SEB. "In its Statement of Opinion the Commission claims that the new bank would gain such a dominant position that not even Nordea and Svenska Handelsbanken would be able to compete with us. We do not share that opinion. In our view competition is tough and constantly growing as new actors enter the market. This is shown not least by the fact that the prices in the banking sector are lower in Sweden than in the rest of Europe. We regret that the conditions to create a large European bank from a Swedish basis no longer exist as the synergies would be lost through concessions."
In the light of this the Boards of Directors of FöreningsSparbanken and SEB have decided to withdraw their notification to the European Commission. The banks choose to individually seek other ways to develop the respective bank.
FöreningsSparbanken AB (publ) Skandinaviska Enskilda Banken AB (publ)
Board of Directors Board of Directors
A press conference will be held on Wednesday 19 September 2001,
at 10.30 am at Strindbergssalen, Berns, Stockholm.