Swedbank, the diversified banking and insurance group known in Sweden as Swedbank ForeningsSparbanken, has bid E1.4 billion to acquire the remaining share it does not currently own in Estonian bank, Hansabank.

The offer, which is equivalent to $1.8 billion, signals the Scandinavian bank’s desire to expand into becoming the largest bank in the Nordic-Baltic region. Swedbank’s offer is equivalent to E11 per share in Hansabank, a 4.7% premium over Hansabank’s closing share price on Thursday.

Hansabank is a logical and attractive option to a financial institution that has ambitious expansion plans like Swedbank, as its operations already comprehensively cover Estonia, Lithuania and Latvia, not to mention a presence in Russia.

The Swedish bank’s offer, of just under $2 billion, is to acquire the remaining 40.3% share it does not currently own of Hansabank, which contributed $510 million to Swedbank’s profits in 2004.

Commenting on the move, Carl-Eric Stahlberg, Swedbank’s chairman, said in a quote reported by the FT.com, We see opportunities for synergies with our product companies and our insurance operations and there’s also scope for cost synergies from functions such as IT and back office, especially considering the advantageous labor cost situation in the Baltics.