Sydbank has agreed to acquire rival Danish banking firm Coop Bank for an initial purchase price of DKK345m ($50.2m).

The agreed price includes payment for the equity value at the acquisition date plus an additional DKK89m ($12.9m).

According to Sydbank, the final cash purchase price will be determined on the acquisition date.

After the acquisition, Coop Bank will become a wholly owned subsidiary of Sydbank.

Coop Bank was founded by Coop in 2013 with the goal of providing daily banking services to the more than two million members of Danish retail and consumer cooperative Coop Danmark.

As part of the agreement, Coop Bank will maintain its exclusive partnership with Coop Danmark, ensuring ongoing membership benefits and financial services for Coop members.

Furthermore, the agreement includes a collaboration aimed at providing attractive value propositions for Coop Bank customers and other Coop Danmark members. This partnership is expected to boost business volume at Coop Bank.

As a result of acquiring Coop Bank, Sydbank’s annual after-tax earnings are projected to increase by approximately DKK40m ($5.8m).

The acquisition is expected to reduce Sydbank Group’s capital ratios by about 0.5 percentage points. It includes approximately 88,000 customers, with 21,000 being NemKonto (Easy Account) customers.

Sydbank is one of Denmark’s largest banks, serving both individual customers and businesses with a range of financial products and services, including loans, mortgages, savings accounts, insurance, and wealth management.

The bank employs over 2,100 people, has total lending activities amounting to DKK78bn ($11.3bn), and holds DKK109bn ($15.86bn) in total deposits.

On the other hand, Coop Bank has total lending of DKK1.3bn ($189.1m) and deposits of DKK3.1bn ($451m).

Sydbank CEO Karen Frøsig said: “I am pleased that we acquire Coop Bank and at the same time conclude a partnership agreement with Coop Danmark. The bank differs from Sydbank and other traditional banks by having created a seamless bank with efficient processes.

“It is a unique offer to the customers who value few and simple choices.”

The implementation of the acquisition is conditional upon approval from the Danish Financial Supervisory Authority (FSA) and the Danish Competition and Consumer Authority, with the terms expected to be met by 31 July 2024.