French lender Société Générale SA agreed to sell its Norway-based equipment finance and factoring unit SG Finans AS to Nordea Finance, the pan-Nordic finance division of Nordea Bank Abp, for a purchase price of €575 million.
The deal, which is subject to customary regulatory approvals, values SG Finans at a price-to-book multiple of 1.07x. The acquisition price will be adjusted for the equity generated up until deal completion, which is expected in the second half of 2020, according to Nordea.
Nordea noted that the deal is expected to have a positive impact of roughly €140 million on its total annual income and consume about 35 basis points to 40 basis points of the group's common equity Tier 1 ratio. The Finland-based group also anticipates the agreement to result in a minor increase in its EPS and return on equity.
Meanwhile, SocGen said it expects a negative impact of about €100 million on its fourth-quarter results, mainly due to goodwill impairment and fixed asset impairments. The French lender also expects the transaction to have a positive impact of about 10 basis points on its group CET1 ratio.
Nordea said it intends to combine SG Finans, which employs 360 people and has operations in Norway, Sweden and Denmark, with Nordea Finance. The deal is in line with Nordea's strategy to drive income growth initiatives, optimize operational efficiency and create better customer experiences.
Additionally, both Nordea and SocGen announced that Nordea Finance and Societe Generale Equipment Finance SA agreed a commercial partnership to offer a range of equipment finance solutions and services to international vendors.