Šiaulių Bankas and Invalda INVL to merge retail businesses in €40m deal

Lithuanian commercial bank Šiaulių Bankas and investment management and life insurance group Invalda INVL will merge their retail businesses following the approval of the latter’s management board.

The transaction with an equity value of €40.2 million is expected to establish a next-generation financial market player which is modern and customer-focused, while generating value for the Lithuanian economy.

Post-closing, the Šiaulių Bankas group will manage second-and third-pillar pension funds and mutual funds in Lithuania, apart from its current financial services.

The group will also offer life insurance services across the Baltic countries while its subsidiary SB Draudimas takes over the life insurance business of Invalda INVL in Lithuania, Estonia, and Latvia.

The merger agreement also facilitates the establishment of a new company within the Šiaulių Bankas group to operate the business of pension and mutual funds in Lithuania.

Vytautas Sinius — Šiaulių Bankas CEO said: “We have no doubt that the synergy from combining experience of these two strong Lithuanian businesses [Šiaulių Bankas and INVL] will spur further competition in the market and create more economic value for Lithuania as a whole.”

Šiaulių Bankas and Invalda INVL to merge retail businesses in €40m deal. Photo courtesy of Pagulbi74/Wikimedia Commons.

On completion of the transaction, Invalda INVL will acquire 62.2 million shares of Šiaulių Bankas, which will translate to a stake of 9.39%.

To close the deal, Šiaulių Bankas will look to issue a targeted share issue priced at €0.645 per share for purchase by the Invalda INVL group,

Based on the financial metrics as on 30 June 2022, Invalda INVL managed €7.5 million worth asset management and life insurance business, after excluding investments in subsidiaries and products.

Darius Šulnis – Invalda INVL President said: “The merger of these retail businesses will deliver greater value for clients, employees and investors.

“INVL’s existing clients will continue to receive professional saving, investment and life insurance solutions as well as having additional access to the bank’s wider suite of services.”

The deal will increase Invalda INVL group’s equity stake in Šiaulių Bankas from the existing 8% stake to around 20%.

The deal will be completed at the end of 2023, subject to certain closing conditions.