A case study of the merger between DnB and Gjensidige NOR.
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M&A is a widespread growth strategy that has continually developed through the years. In it’s current phase, industry consolidation seems to be the primary driver behind the M&As. Banks need to consolidate to be able to compete in a market where margins on traditional products such as lending and deposits have been decreasing steadily for the past two decades. And competition from both domestic and foreign actors is getting tougher. Borders are not the barriers they once were, due to a coordination of rules and regulations as a result of the establishment of the European Union, and thereby the Economic and Monatary Union. This has facilitated operations across borders. Consolidation has taken place on a broad scale in the Norwegian banking industry, as witnessed by the ever decreasing number of, especially savings banks, but also the total number of banks in Norway. Banks have consolidated to increase their size, to be able to better withstand the pressure of increased competition from ever larger competitors. But in all this consolidation, what kind of values have been created? What kind of synergies have been realized? These are the questions that this paper sought to answer. Through a case study of the most recent, and coincidentally the largest merger in Norwegian banking history, this thesis has tried to get a holistic understanding of the values that were created in that merger, and through which synergies they were unlocked. Through a basis in written documentation such as, annual reports and analyst reports, and depth of thoughts and personal assessments through interviews, it was possible to gain a deep insight into the values created, what synergies were realized, and how it all benefited the stakeholders of the merged companys. The thesis concludes that the merger was based on two companies that had a good complementary fit. The merger process was well executed and most, if not all, synergies that were estimated pre-merger, were realized post-merger. The results show the ultimate importance of unlocking cost synergies in the mission to complete a successful merger. Even if this merger was ultimately successful, the results indicate that there were still values left behind. Especially in the area of asset management, where DnB NOR quickly after the merger lost about half of their market share. In a similar situation regarding the area of factoring and leasing, one of their divisions were sold of. The result being that they kept their market share with the remaining division, and the money from the sale.