Mallesons Stephen Jaques acted for National Australia Bank (NAB) on the sale of the Northern Bank and the National Irish Bank for nearly $2.45 billion to Danske Bank Group.
Although the ownership of both banks passed to Danske on 28 February this year after work began on the deal in earnest in April 2004, final adjustments to the sale were announced only last week, which revised the final profit of $1.043 billion, down by $30 million from the original forecast of $1.073 billion. The NAB had owned the Northern and National Irish Banks since 1987.
Craig Semple, M&A partner at Mallesons, was responsible for the delivery of all legal services on the transaction in Australia, which included due diligence, including the impact on the NAB group’s insurance arrangements, and was primarily responsible for liaising with the lead UK firm on the deal, Cameron McKenna, and Matheson Ormsby Prentice, the legal advisers in the Republic of Ireland.
Semple said one of the most challenging aspects of the sale was the separation of the Northern and National Irish banks information and processing systems from the NAB’s other UK banks — the Clydesdale and Yorkshire banks. “A lot of the back-end processes were very integrated, and working out how to separate the Northern and National Irish banks was [difficult].”
The NAB also allowed for £50 ($118) million in separation costs of the Irish businesses.
Semple said it was the first time that Danske had bought an asset in the UK or Ireland. There have also been costs associated with an investigation into the banking system. The NAB has provided indemnities for possible liabilities associated with the investigation.
In addition, in December last year, £26.5 ($62.8) million was stolen from the Northern Bank in the world’s biggest bank cash heist.
“Importantly, the sale will allow our leadership team to focus all their attention on our operations in Great Britain,” said NAB’s chief executive John Stewart at the time of the sale announcement. “We are committed to retaining and growing these businesses and we are making good early progress on some key strategic projects.” The NAB is now focusing on expansion in the South East of England.