Sweden's SBB to offload community property portfolio in deal valued at $3.4 billion

(Reuters) -Troubled Swedish real estate group SBB said on Tuesday it will sell its community property portfolio to Oslo-listed Public Property Invest in a transaction valuing the assets at 32 billion Swedish crowns ($3.40 billion), as it seeks to reduce its debt burden.

SBB, which owns properties such as hospitals and care homes, is among several European property firms forced to restructure and cut debt amid high interest rates and economic headwinds, particularly in Sweden.

The deal covers three wholly owned subsidiaries collectively known as "SocialCo", comprising around 740 properties across Sweden, Norway, Denmark and Finland. SBB expects to receive more than 11 billion Swedish crowns in net cash proceeds, which it plans to use to redeem or repurchase outstanding bonds and other purposes.

The company said the transaction is expected to generate annual operating synergies of 100 million Swedish crowns.

"The proceeds from this divestment enable us to manage our debt profile efficiently, strengthen our financial stability, and benefit from a more favorable funding environment," SBB CEO Leiv Synnes said.

As part of the deal, Norway's Aker, through APG Invest, committed to subscribe for 1.3 billion Norwegian crowns in a private placement, acquire part of the non-voting PPI shares issued to SBB for 4.1 billion Norwegian crowns, and exchange 3.9 million ordinary PPI shares for an equal number of non-voting shares held by SBB, Aker said in a separate release.

The transaction is expected to close in the fourth quarter of 2025 or the first quarter of 2026, pending shareholder and regulatory approvals. Upon completion, PPI will become Europe's largest listed social infrastructure platform, with assets totaling 53 billion Norwegian crowns ($5.28 billion), SBB said.

($1 = 9.4155 Swedish crowns)

($1 = 10.0431 Norwegian crowns)

(Reporting by Mrinmay Dey in Bengaluru; Editing by Krishna Chandra Eluri)