Kaupthing Bank and SPRON in Merger Negotiations Skip to content

Kaupthing Bank and SPRON in Merger Negotiations

Kaupthing, Iceland’s largest commercial bank, and SPRON, the Reykjavík Savings Bank, announced on Wednesday that they have entered negotiations regarding a potential merger between the companies, which are expected be completed within two weeks.

“We have agreed to participate in these negotiations” SPRON CEO Gudmundur Hauksson told Morgunbladid. “But they don’t yet involve any solid commitment on behalf of SPRON.”

Talk of merging the two companies first surfaced in 2003. Ingólfur Helgason, director of Kaupthing’s Iceland branch, said that the same arguments for a merger still applied.

“SPRON has a very strong position in the individual market and among smaller and medium-sized companies in the capital region but we have a stronger network across Iceland,” Helgason said.

Kaupthing Bank and SPRON both hold a large stake in Exista, the financial service company, so if they merge, their combined stake will be 17 percent. Exista is also one of the largest shareholders in Kaupthing with a 23.3 percent stake.

Such cross holdings, which are rather common in Iceland, have been criticized by foreign financial experts.

Any merger of the companies is subject to the approval of a SPRON shareholders’ meeting, the Board of Directors of Kaupthing, the Icelandic Financial Supervisory Authority, the Icelandic Competition Authority and the companies’ creditors.

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