SEB, the Nordic region's biggest asset manager, ended four months of speculation with the acquisition of Germany's fifth largest private bank from France's Credit Lyonnais at a price 13 per cent below BfG's net asset value.

But analysts questioned the worth of BfG, which has been up for sale since 1998 when the European Commission ordered Credit Lyonnais to sell its 50 per cent stake to get EU approval for a state rescue plan.

Credit Lyonnais bought out the other two BfG shareholders, German trade union holding company BGAG and insurer Aachener und Muenchener Beteiligungs AB prior to selling the bank.

"I think (the deal) is stupid. I see no logic in it at all. The only possible logic in it would be the low price," Ian McEwen, bank analyst at Lehman Brothers, said.

"SEB talks about the Internet and savings but BfG is no good at either of them. BfG is one of the weakest banks in Germany," he added.

SEB said the deal would be a platform for aggressive international expansion in Internet banking and savings -- a key area for SEB and where BfG has focused in recent years.

"It gives us an opening into Europe. It is well in line with our savings strategy, offering us a greater critical mass within the area of savings that will lead to increased efficiency," SEB chairman Jacob Wallenberg said in a statement.

"The financial conditions are most attractive. Above all...it will provide us with an opportunity for increased growth."

SEB BUY FAILS TO IMPRESS MARKET

SEB's share moved little on the deal, steady at 82 crowns.

The bank, controlled by Sweden's powerful Wallenberg family,has been eyeing the Baltics, Poland and Germany for acquisitions to expand outside the Nordic region where rapid Financial sector consolidation in recent years has reduced buying opportunities.

BfG will boost the value of SEB's assets under management by110 billion crowns to 720 billion crowns. The takeover, expected to occur in January, will also put a large part of SEB's operations into the EMU area, of which Sweden is not a member.

SEB said buying BfG was expected to provide total potentialcost savings of 540 million crowns and would marginally increase earnings per share (EPS) as early as 2000.

In addition, measures to encourage growth were estimated ata further 540 million crowns to impact the result from 2003.

"We expect a total profit improvement of 120 million euroswhich will come gradually...by 2005," the bank's deputy CEO Lars Lundquist told a news conference. "The aim is that BfG will help reach SEB's goal of a 15 percent return on equity."

SEB earlier on Monday posted a nine-month operating profitof 3.79 billion crowns against 1.76 billion a year ago, slightly below market expectations of 3.94 billion crowns.