Šiauliu Bankas and Invalda INVL Completed the Merger of Retail Businesses

On 30 November 2023, Šiauliu Bankas Group companies, i.e., Šiauliu Bankas AB, life insurance company SB Draudimas UAB, and SB Asset Management UAB, signed the necessary documents with Invalda INVL Group companies, i.e., Invalda INVL AB, INVL Asset Management UAB, INVL Life UADB, and brokerage firm INVL Financial Advisors UAB, effectively merging, as of 1 December 2023 (at midnight from 30 November 2023 to 1 December 2023), their businesses under the Master Agreement of 22 November 2022 for the merger of retail asset management and life insurance businesses managed indirectly by Invalda INVL with Šiauliu Bankas Group (hereinafter, the Transaction). More details of the Transaction were published in the Notification on Material Event of 23 November 2022, the Notification of 22 February 2023, and the Notification of 22 November 2023.

Following the completion of the Transaction, Šiauliu Bankas Group, in addition to the financial services it already provides, will, as of 1 December 2023, manage second- and third-pillar pension funds and investment funds for retail clients in Lithuania. The pension and investment fund business in Lithuania will be managed through SB Asset Management UAB, controlled by the Bank.

Šiauliu Bankas Group will also significantly expand its life insurance business in the Baltic States, which will be taken over by the bank-controlled life insurance company SB Draudimas UAB (operating in Latvia and Estonia through its own branches).

In total, the Transaction involves more than 210 thousand clients and over EUR 1.2 billion of assets under management in the Baltics. As a result of the Transaction, the combined funds entrusted by clients to Šiauliu Bankas Group as deposits, assets under management and assets under custody will increase by a quarter and surpass EUR 6 billion (as of 31 October 2023). 160 specialists, investment managers and experts who worked for INVL will also join Šiauliu Bankas Group, bringing the total number of employees in the Group to over 1,100.

"The Transaction opens new growth opportunities for us. Combining the businesses, competences and best practices of the entities will allow us to become more competitive, and we are determined to grow faster than the market in the three key areas – retail, corporate and investment client segments. We aim to offer broader, more flexible, and tailored financial solutions for our clients. I believe that these ambitions will encourage progress of the entire financial market in Lithuania,” says Vytautas Sinius, CEO of Šiauliu Bankas.

The Transaction price is EUR 41.8 million and consists of:

• the fixed part of the principal price of EUR 40.2 million, determined as at the date of signing of the Master Agreement and paid by way of set-off between Šiauliu Bankas AB and Invalda INVL of the claims under the Master Agreement and other Transaction documents,

and

• the variable part of the price, the terms and conditions of which are set out in the Master Agreement, which is fixed by the parties to the Transaction at EUR 1.6 million and which is payable in cash.

The final share of the Transaction price for the retail asset management business to be merged is EUR 32.8 million and for the life insurance business – EUR 9.0 million. Once the Transaction has been finalised, Invalda INVL will hold 9,39 per cent of the authorised capital of Šiauliu Bankas. To this end, Šiauliu Bankas is issuing a new targeted issue of 62,270,383 shares at a price of EUR 0.645 per share. This issue is subject to the Bank of Lithuania’s authorisation to register amendments to the Articles of Association of Šiauliu Bankas. This regulatory authorisation can only be obtained after the payment of the new Šiauliu Bankas shares.

The Transaction will therefore be finalised upon receipt of the aforementioned authorisation of the Bank of Lithuania to register the amendments to the Articles of Association of Šiauliu Bankas, registration of the increase of the bank’s authorised capital in the Register of Legal Entities, registration of the new shares in Nasdaq CSD SE, and their admission to trading in the regulated market of Nasdaq Vilnius AB (which is expected to take place before the end of 2023).

Following the completion of this and other planned acquisitions, Invalda INVL will increase its shareholding in Šiauliu Bankas to almost 20%.

Effective December 1, 2023, Vaidotas Rukas, who was previously the Head of INVL’s Investment Management Division, becomes the CEO of SB Asset Management. Rasa Kasperaviciute, who previously served as Director of INVL Life, becomes the new CEO of SB Draudimas.

Additional information:
Tomas Varenbergas
Head of Investment Management Division
tomas.varenbergas@sb.lt