A 5.5 Billion Deal Between Nordea And Gjensidige Which Leads To A Win-Win Situation For Sampo!

About: Gjensidige Forsikring ASA (GJNSF), Includes: GJNSY, NRBAY, NRDEF, SAXPF, SAXPY
by: The CrickAnt
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The CrickAnt
Long only, value, insurance, mid-cap

Gjensidige entered into a share agreement with Nordea with the sale of Gjensidige Bank ASA.

With this sale, Gjensidige will withdraw from the Norwegian bank market, and Nordea will become the second largest bank in Norway.

Then, some questions pop up in investors' minds: Why? Who is the winner of the deal? What about the dividend sustainability?

I will try weighing the pros and the cons of the deal, from Gjensidige's perspective.

Executive Summary

On 2nd of July, Gjensidige (OTC:GJNSF)(OTCPK:GJNSY) announced that it would sell its bank subsidiary to Nordea (OTCPK:NRBAY)(NRDEF) for a price of NOK 5.5 billion ($660 million).