Norwegian bank DNB to buy Sweden's Carnegie for $1.14 billion

STOCKHOLM (Reuters) -Norway's largest bank DNB has agreed to buy Swedish investment bank and asset manager Carnegie from private equity firm Altor and minority owners for around 12 billion Swedish crowns ($1.14 billion), it said on Monday.

DNB said in a statement it expects to finalise the all-cash acquisition of Carnegie, which is subject to official approvals, in the first half of 2025.

"We and Carnegie are realising our joint ambition to build a leading player across the Nordic region in investment banking, securities brokerage and research, corporate banking, private banking and asset management," it said.

While Europe's biggest banks have bolstered their resilience since the 2008 crisis, longer-term earnings growth could come under pressure again as interest rates fall.

Some lenders have already turned to deal-making to diversify their income. BNP Paribas is buying AXA Investment Managers, while UniCredit built a stake in Germany's Commerzbank.

Carnegie, which employs around 850 people, had 436 billion Swedish crowns in assets under management as of Sept. 30.

DNB said it expects the deal to generate a return on invested capital above 15%, and lead to some efficiency gains across the combined operations.

"The primary value driver of the transaction is the growth opportunities unlocked by a stronger combined Nordic platform and enhanced client offering which are expected to generate the majority of transaction benefits," it said.

DNB said DNB Markets and Morgan Stanley were acting as its financial advisors, while Carnegie Investment Bank, Goldman Sachs and Lenner & Partners acted as financial advisors to Carnegie.

DNB is due to report quarterly results on Tuesday. European peers Deutsche Bank, Lloyds and Barclays will also report this week.

Europe's biggest banks are healthier than at any point since the financial crisis, but investors will want reassurance that they can trust their longer-term earnings power as interest rates fall.

($1 = 10.5308 Swedish crowns)

(Reporting by Anna Ringstrom, editing by Stine Jacobsen and Jan Harvey)