SpareBank 1 BV (OB:SBVG) entered into a letter of intent to acquire SpareBank 1 Telemark (OB:SBTE) on November 30, 2020. SpareBank 1 BV reached agreement to acquire SpareBank 1 Telemark for approximately NOK 650 million on February 22, 2021. Under the agreement, both the parties agreed on an exchange ratio of 60% to SpareBank 1 BV and 40% to Sparebanken Telemark. In connection with the merger SpareBank 1 BV and Sparebanken Telemark will convert NOK 800 million of primary capital to equity certificate capital and issue equity capital certificates to respectively Sparebank 1 Stiftelsen BV and Sparebankstiftelsen Telemark – Grenland. The conversion will be made pro rata by reference to the size of the banks' primary capital funds as at December 31, 2020, with the result that approximately NOK 436 million is converted for SpareBank 1 BV and approximately NOK 364 million is converted for Sparebanken Telemark. Following this the merged bank will have an equity certificate capital ratio of approximately 60% at the time of implementation of the merger. Equity capital certificates in SpareBank 1 BV that are issued as consideration to existing equity capital certificate holders in Sparebanken Telemark and to Sparebankstiftelsen Telemark – Grenland on conversion of primary capital are to be issued at a price of NOK 39.31 per equity capital certificate. This corresponds to the three-month volume-weighted price as at February 17, 2021, less the proposed dividend of NOK 1.90 per equity capital certificate in SpareBank 1 BV. 10,498,569 new equity capital certificates will be issued to Sparebank 1 Stiftelsen BV at NOK 41.49, and 7,973,009 new equity capital certificates will be issued to Sparebankstiftelsen Telemark – Grenland in connection with the conversion of primary capital. 37,116,986 new equity capital certificates will be issued to current owners of equity capital certificates in Sparebanken Telemark. This means that one equity capital certificate in Sparebanken Telemark will be exchanged for approximately 3.41 equity capital certificates in the merged bank. Accordingly, SpareBank 1 Stiftelsen BV, Sparebankstiftelsen Nøtterøy – Tønsberg, Other owners in SpareBank 1 BV, Sparebankstiftelsen Telemark – Grenland, Sparebankstiftelsen – Holla og Lunde and Other owners in Sparebanken Telemark will have 20.35, 9.2%, 32.5%, 15.9%, 8.7% and 13.4% stake in merged bank, respectively. Post merger the combined bank will be known as SpareBank 1 Sørøst-Norge.

The current Chief Executive Officer in Sparebanken Telemark, Per Halvorsen, will be the Group Chief Executive Officer and the current Chief Executive Officer in SpareBank 1 BV, Rune Fjeldstad, will be a special adviser to the Chief Executive Officer and the board for 6-18 months after the completion of the merger. The transaction is subject to due diligence investigation, approval of the merger plan and related agreements in the banks' respective boards and supervisory boards, necessary approvals from the authorities and contract parties on acceptable terms. Transaction is also subject to approval from the Financial Supervisory Authority of Norway and the Norwegian Competition Authority. The transaction is expected to enter into definitive agreement by the end of February 2021. The agreement will then be submitted to the banks' supervisory boards for a decision at their meeting on March 25, 2021. The transaction was unanimously approved by the boards of both banks. As of March 25, 2021, the supervisory Board of SpareBank 1 BV and SpareBank 1 Telemark approved the transaction. As of April 9, 2021, the transaction has been approved by the Norwegian Competition Authority. According to the preliminary timetable, implementation of the merger is planned for June 1, 2021. As of February 22, 2021, the intention is that the merger should be implemented at the beginning of June 2021. As of March 25, 2021, the transaction is expected to be finalized on June 1, 2021. SpareBank 1 Markets AS and Arctic Securities AS acted as financial advisor to SpareBank 1 BV and SpareBank 1 Telemark respectively. Advokatfirmaet Selmer DA acted as legal advisor to SpareBank 1 BV and SpareBank 1 Telemark.