CEO of Luminor Group Erkki Raasuke

It was announced yesterday that the world’s largest private capital firm Blackstone will acquire the majority of Luminor Group that will mark the biggest transaction in the Baltic countries for the past decade and could possibly be the greatest ever acquisition in the region. Blackstone will pay more than a billion euros for 60 percent of Luminor.

«It is a deal to rival the takeover of Hansapank,»said Sven Papp, partner at Blackstone’s counsel Ellex Raidla.

«It is the largest acquisition of a universal bank majority holding by a private capital firm in the world and one of the largest merger and takeover deals in the history of the Baltic countries,»Blackstone’s press release reads. Financial Times reports the transaction marks Blackstone’s first investment in the Baltics.

Because Nordea wishes to sell all of its shares in Luminor, the transaction could end up outshining the takeover of Hansapank by Swedbank in 2005. Such transactions are usually tied to a number of actions for which private capital firms charge a separate commission. Blackstone’s counsel in this matter will be former CEO of Swedbank Michael Wolf. Current CEO of Luminor Erkki Raasuke served as CFO of Swedbank during Wolf’s reign.

The transaction will be handled using Blackstone’s newest private capital fund worth $18 billion, giving Luminor substantial weight in the company’s portfolio. The fund is managed from London.

However, it needs to be said that of the €1 billion to be paid to Luminor’s current shareholders not a cent will reach Estonia. The money will go to Scandinavia. Estonia’s share will be the fees of Ellex Raidla and other consultants.

The bank’s current owners DNB and Nordea will keep 20 percent each, while the latter is in talks with Blackstone over selling its entire holding.

Nordea wants to simplify its business and concentrate on its main markets in Scandinavia.

DNB sees opportunity in the Baltic region. «We want to be among Luminor’s minority shareholders because we believe the company has value for its clients, employees and shareholders. The bank has a strong digital focus, very capable employees and a strong presence in the Baltic countries,»said CFO of DNB Kjerstin Braathen via a press release.

The Luminor acquisition should dissipate mistrust in Baltic banking as, especially Latvia and Estonia, have been associated with money laundering scandals lately.

CEO of Luminor Erkki Raasuke told Postimees that he would not have guessed the subject matter of money laundering to play such an important role in negotiations.

«During this process, we spent roughly 50 percent of our energy and attention on the know your client principle, money laundering and sanctions,» he says in an interview.

«Blackstone will undoubtedly lend credibility to the ownership structure of Estonian banks,»chairman of the board of the Estonian Financial Supervision Authority Kilvar Kessler said in a press statement. «Transparency and stability of ownership structure is equally important,»he added.

Luminor Bank was created on October 1 last year after Scandinavian banks DNB and Nordea decided to abandon their Baltic units and create an independent bank in their place.

postimees.ee
Blackstone Luminor Group
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
2 views in december
I recommend
No recommendations yet

Comments

Post your comment to communicate and discuss this article.

Society
Estonia's biggest banks are reminding their customers ahead of the upcoming holidays that interbank transfers will be significantly affected by the upcoming Christmas holidays — even beginning as soon as this weekend. Swedbank announced that if an interbank transfer has not been completed by the end of the business day on Friday, 21 December, the money sent will only be received by the other bank next Thursday, 27 December. SEB and LHV both noted that they...
Society
In a doctoral thesis successfully defended at Tallinn University (TLÜ) on Monday, Dr Maarja Merivoo-Parro examined what Estonian life was like in the Cold War-era United States and how this manifested in humor, music, education, recreation and academic mobility. Following the abolishment of serfdom, Estonians have been involved in a number of significant waves of migration, both voluntary and involuntary. It is due to this migration that Estonians have a w...
Society
At the Riigikogu sitting beginning at 10:00 EET on Tuesday, Prime Minister Jüri Ratas (Centre) will provide an overview of the activities of the Estonian government in the implementation of EU policies. Chairman of the European Union Affairs Committee of the Riigikogu Toomas Vitsut (Centre) will also deliver a report, and representatives of the Riigikogu's parliamentary groups will present their positions, according to a Riigikogu press release. In his rep...
Society
Chairman of the opposition Conservative People's Party of Estonia (EKRE) Mart Helme has called on Helir-Valdor Seeder, chairman of junior coalition member Pro Patria to tie the latter's support for the state budget bill to a decision by the government not to support joining the UN Global Compact on Migration. "Pro Patria still has the chance to demand from its coalition partners [the Center Party and the Social Democratic Party (SDE)] that its stances be t...
Society
Political news portal Politico published its list of the most influential people in Europe next year last week, with fifth place going to Estonia’s cybersecurity ambassador Heli Tiirmaa-Klaar. Tiirmaa-Klaar takes her place in between well-known Europeans, after Secretary General of the European Commission Martin Selmayr and in front of Ukrainian presidential hopeful Yulia Tymoshenko. Politico believes Italy’s populist interior minister Matteo Salvini will...
Society
Representatives of the transport ministries of the Baltic states, Finland and Poland who met in Tallinn on Monday were of differing opinions regarding whether to remain in summer or winter time once the practice of changing the clocks twice per year comes to an end. A recent survey indicates that more than half of Estonians would prefer permanent summer time. Estonia, Latvia, Lithuania, Finland and Poland jointly acknowledged that the agreement to end the...
Society
Ida-Viru Central Hospital is having trouble with patients not showing up to scheduled specialist appointments. To combat this issue, beginning next year, the hospital will start charging visit fees for no-show appointments as well. Last year, patients at Ida-Viru Central Hospital failed to show up for scheduled appointments a total of nearly 9,500 times, accounting for some 5% of all hospital visits, reported ETV news broadcast Aktuaalne kaamera. "Patients...
Society
Tallinn city government finds that it is not reasonable to relocate the Tallinn Bus Station to the Ülemiste district near Tallinn Airport and that it should be left in its current location on Lastekodu Street. In connection with the preparation of an architectural idea competition and the drawing up of a detailed plan for the Ülemiste terminal in the framework of the Rail Baltic railway project, the city is drawing the attention of the Ministry of Economic...
Society
A criminal investigation has been launched into the Medita Clinic, one of the largest private sector bidders in public procurement tenders in the health sector in Estonia. The Northern District Prosecutor's Office initiated the investigation in accordance with the Penal Code section concerning the transmission of false information, according to ETV investigative show Pealtnägija. The Medita Clinic was the largest private provider of specialist medical care...