Storebrand Buys Danica Pension Norway
Posted on 12/26/2021
The Norwegian market for Defined Contribution pensions amounts to approximately NOK 420 billion in assets under management and NOK 36 billion in annual premiums, according to Finance Norway. Market growth has been strong over the last 10 years and Storebrand expects the market to continue to grow by more than 10% annually in the coming years.
Disclosed on November 20, 2021, Storebrand Livsforsikring AS entered into an agreement to buy 100% of the shares in Danica Pensjonsforsikring AS, Norway (Danica).
Danica, a subsidiary of Danske Bank, is the 6th largest provider of Defined Contribution pensions in Norway with 5% market share. In addition to managing NOK 22 billion of Defined Contribution pensions for 14,000 companies and 98,000 active members, Danica manages NOK 6 billion of retail savings and a small back book of guaranteed products of NOK 1 billion. Total assets under management amount to approximately NOK 30 billion. Danica also offers commercial and personal risk products, totalling approximately NOK 300 million in annual premiums for own account. Profit before tax amounted to NOK 127 million in 2020. Most of the distribution is through Danske Bank, which will continue to distribute the products from Storebrand.
Payments
Storebrand Livsforsikring AS will pay NOK 2.01 billion for the shares of Danica (adjusted for the change in the net asset value of Danica in the period from 30 September 2021 to 31 December 2021). The transaction will be funded by available funds in the company portfolio, which amounts to NOK 24 billion. The immediate effect on the solvency ratio for Storebrand Group is expected to be minus 5 percentage points. It is expected that the transaction will strengthen the Group’s solvency generation and dividend capacity going forward – supported by capital, cost and distribution synergies – and that it will be accretive for the Group’s return on equity. The acquisition will not impact Storebrand’s ordinary dividend capacity for the financial year 2021.
The conclusion of the transaction is expected in the first half of 2022 and is subject to approval from the Norwegian Financial Supervisory Authority and the Norwegian Competition Authority as well as certain other customary transaction conditions.
Advisors
ABG Sundal Collier acts as the financial and transaction adviser, Thommessen as the legal adviser, and Deloitte as the Financial Due Diligence advisor, for Storebrand.
Keywords: Storebrand ASA, Danica Pension.
