Nordea has signed an agreement to purchase Sampo's Polish life and pension companies. The acquisition will further enhance Nordea's platform for continued profitable growth in the Polish market. The transaction is expected to be completed in the fourth quarter this year following approval by the relevant authorities. The purchase price is EUR 95m, and includes the two companies Sampo PTE and Sampo Life S.A in Poland.
Sampo PTE is the fifth largest pension fund in Poland. It operates within the fast growing individual compulsory pension market, which is a new pension segment for Nordea in Poland. Sampo Life, a traditional life company, will be merged into Nordea's Polish life company, Nordea Zycie.
Nordea acquires a customer base of 556,000 active pension savers with assets under management of approximately EUR 600m.
"The compulsory pension system is one of the fastest growing segments of the long-term savings market in Poland with an expected growth rate of around 20 per cent annually", says Allan Polack, Head of Life & Pensions in Nordea. "It offers stable monthly savings flows into pension funds and it is without traditional guaranteed returns. In addition, Poland is expected to have stable GDP growth leading to increased welfare and subsequently a high demand for savings products", concludes Allan Polack.
Through the transaction Nordea more than doubles its customer base in Poland to 925,000. This creates the possibility for Nordea Bank Polska to offer its products to the new customer base. In addition Nordea will become a full service provider of savings-related products also offering life and pension products to its existing customer base.
The effect on Nordea's earnings per share and return on equity will be negligible. The acquisition will create the platform for growth in embedded value of around EUR 20m annually from 2005.
