As part of the transaction, the consortium will acquire a 60% majority stake in the bank alongside its current owners for €1 billion.
Created in 2017 through the combination of Nordea’s and DNB’s operations in the Baltics, Luminor is the third largest financial services provider in the region, with a 23% lending market share, €15 billion of assets, 3,000 employees and 64 branches across the region.
Nordea and DNB will retain an equal 20% equity stake in Luminor and will continue to support the bank with long term funding, however Blackstone has also entered into an agreement with Nordea to purchase their remaining 20% stake "over the coming years".
The transaction represents the largest majority stake acquisition of a universal bank by private equity in the last decade globally, and one of the largest M&A transactions in Baltic history.
According to Nils Melngailis, Chairman of the Board of Luminor Group said: “Blackstone’s investment is fully aligned with the bank’s vision, and their support will both strengthen and accelerate the execution of our strategy to become the leading independent financial group focused on the Baltic region.
"This transaction represents a significant foreign direct investment in the region and as one of the largest private equity deals in Baltic history, Blackstone’s decision to invest in Luminor represents a validation of our strategy and is a vote of confidence in the economic outlook for Estonia, Latvia and Lithuania. Our long-term plan also remains to seek a stock exchange listing subject to prevailing market conditions,” said Melngailis.
Nadim El Gabbani, Senior Managing Director at Blackstone, said: “This is an exciting opportunity to invest in an excellent business operating in an attractive market."
Sanda Liepiņa, CEO, of the Finance Latvia Association told LSM the deal was a positive signal about the future of the sector.
“The transaction represents the largest majority stake acquisition of a universal bank by PE in the last decade globally and one of the largest M&A transactions ever in the Baltics. Blackstone 's entry into the Baltics is a strong vote of confidence on the future development potential of this market. This strengthens the reputation of the industry, demonstrates long term ability to operate in accordance with the highest compliance standards, will promote the implementation of highest standards for sustainable investing in the Baltics and in the Single EU market. We expect further deepening of the strategy chosen by Luminor and members of the Finance Latvia Association – that of close co-operation and partnership with start-ups and other innovative financial service providers,” said Liepiņa.
