FöreningsSparbanken (Swedbank) and SEB have broken off a planned $5.2 billion merger rather than succumb to conditions imposed by the European Commission.
The combined bank would have controlled two-thirds of Sweden's credit-card market and SME banking relationships, more than half the mutual fund and mortgage markets, and approximately 40% of personal current accounts and loans.
In a recent ruling, the EU Competition Authority had objected to the proposed merger and called for significant concessions, including the disposal of office and product assets.
"The European Commission and the banks have different views of the Swedish bank market," says Jacob Wallenberg, chairman of the Board of SEB. "In its Statement of Opinion the Commission claims that the new bank would gain such a dominant position that not even Nordea and Svenska Handelsbanken would be able to compete with us. We do not share that opinion. In our view competition is tough and constantly growing as new actors enter the market. This is shown not least by the fact that the prices in the banking sector are lower in Sweden than in the rest of Europe. We regret that the conditions to create a large European bank from a Swedish basis no longer exist as the synergies would be lost through concessions."