Create leading Nordic investment bank

Orkla and Enskilda Securities have reached an agreement in principle to merge the investment banking activities in Orkla Securities and Enskilda Securities. Following the merger, Orkla will hold 22.5% of the shares in Enskilda Securities AB, and SEB the remaining 77.5%.

Orkla Securities is one of the largest investment banks in Norway within equity trading, equity research and corporate finance, and has more than 100 employees. Enskilda Securities is one of the largest Nordic investment banks with similar activities. Enskilda Securities has approximately 420 employees.

The combination will create the leading Nordic investment bank with very strong market positions. Total pro forma income amounted to approximately SEK 2.5 billion in 1999 and the number of employees to 525. The new investment bank will be represented in nine countries. The pro forma market share on the Oslo Stock Exchange was 12.6% in 1999 and 10.6% on the OM Stockholm Exchange. Some cost synergies will be generated, but above all the merger will create a potential to reinforce the strong growth that both Enskilda Securities and Orkla Securities have seen through 1999. The name “Orkla Enskilda Securities” will be used in the Norwegian market.

The Nordic market for equity trading and corporate finance services is growing rapidly. In 1999 the turnover at the OM Stockholm Exchange increased by 43% and at the Oslo Stock Exchange by 38%. The compounded annual growth rate between 1996 and 1999 has been 42% and 24%, respectively. Within the corporate finance sector, in particular mergers and acquisitions display strong growth.

Per-Anders Ovin, CEO Enskilda Securities AB:
“1999 was an excellent year for Enskilda Securities. In Norway, we have strengthened our position, but have not achieved the same success as in other markets. The merger will thus give us the opportunity to further strengthen our Nordic platform, which is crucial if we are to be successful in our European ambitions. Enskilda Securities and Orkla Securities display good complementarity, and we also run our businesses in a similar manner. Furthermore, Orkla has a very strong and valuable network in Norway and internationally which we will be able to capitalise on. ”

Lars H. Thunell, CEO SEB and Chairman Enskilda Securities AB:
“We believe that the merger will increase the value of our shareholding in Enskilda Securities, and it shows that we are open-minded as regards to various types of solutions for our subsidiaries and business areas. The merger also strengthens our connections to Orkla, one of the most important groups in Norway”.

Tom Vidar Rygh, Executive Vice President Orkla ASA:
“Orkla Securities has a very strong and leading position in Norway. In order to succeed internationally there is, however, a need to create larger units to increase profitability. The merger solves important strategic issues for both Orkla Securities and Enskilda Securities, and the companies also have a large degree of complementarity. We look forward to participating as a long-term shareholder together with SEB. We will support the new entity’s development in an industry that, we believe, will be interesting and show strong growth in the future”.

It is proposed that Tom Vidar Rygh, Executive Vice President Orkla ASA, will be elected as Orkla’s representative on Enskilda Securities’ Board of directors.
The agreement in principle and the transaction are, among other things, conditional upon a confirmatory due diligence and upon receiving necessary regulatory approvals.

Press conference
A press conference will be held today at 2.00 pm local time at Orkla Finans’ office, Tordenskioldsgate 8-10, Oslo, with Tom Vidar Rygh, Lars H. Thunell and Per-Anders Ovin.