The Norwegian Competition Authority (NCA) may block a bid by Norway’s largest bank DNB for domestic rival Sbanken, and will extend its review of the planned tie-up until August 26, the watchdog stated on Thursday.
While more than 90% of Sbanken’s shareholders have accepted DNB’s offer of 11.6 billion crowns (US$1.36 billion), completion of the deal hinges on approvals by the competition regulator, the bank regulator and the finance ministry.
“The authority’s preliminary view is that the transaction may weaken competition in the market for mutual funds. This may lead to higher prices and harm consumers who invest in such funds,” the competition watchdog said in a statement.
The NCA must decide by August 26 whether to allow the acquisition to go through or not. If it wants to block it, the two banks will in turn have a chance to respond before the regulator makes its final ruling by October 7.
If permitted, a takeover of the online-only Sbanken would increase DNB’s share of the Norwegian mortgage market to an estimated 27% from about 24% while also strengthening its asset management business.
“(DNB) is satisfied that the NCA has confirmed that potential competition concerns only relate to (the) distribution of funds and not mortgage loans or other bank services which constitute the main part of (Sbanken’s) operations,” DNB said in a statement.
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