Iceland's Glitnir bank sells Swedish subsidiary
AFP/The Local · 17 Oct 2008, 10:35
Published: 17 Oct 2008 10:35 GMT+02:00
Swedish bank HQ "has entered an agreement ... to acquire all the shares in Glitnir AB (the Swedish subsidiary) for a purchase price of approximately 60 million kronor ($8.12 million) to be paid in cash upon completion," according to a joint statement.
"The acquisition is a complement to HQ's existing investment banking operations and ... will enhance HQ's value through a wider product offering," it added.
According to the deal, HQ will not take over any of Glitnir AB's Icelandic parent company's obligations "such as client claims or payments due, since the transaction only involves the Swedish-based" branch.
Glitnir was taken over by the Icelandic state last week, along with the country's other two leading banks.
"We see this as a unique opportunity to acquire a company with a good value proposition and strong market share despite the harsh market conditions," HQ's deputy chief executive Fredrik Crafoord said in the statement.
The deal, which still must be approved by the Swedish Financial Supervisory Authority, is expected to have a "marginal positive effect on HQ's earnings per share for the current year."
The announcement comes two days after Glitnir's Finnish branch announced its local management had bought it from the crisis-ridden parent company.
Iceland's government announced on September 29 that it had taken over 75 percent of Glitnir, which was teetering on the brink of bankruptcy due to a lack of liquidity.
The country's Financial Supervisory Authority has since then officially taken control of the bank's domestic business, creating a new fully state-run bank called New Glitnir Bank.
It also acquired Iceland's two other cash-strapped leading banks, Kaupthing and Landsbanki.