By Dominic Chopping

STOCKHOLM--Shares in Swedish property group SBB surged as much as 31% Tuesday after a unit of Norway's Aker agreed to buy stakes in both the company and its majority-owned Norwegian property company.

Aker Property Group will buy stakes in SBB--formally known as Samhallsbyggnadsbolaget i Norden--and Public Property Invest, making it SBB's largest shareholder and PPI's second largest.

Under terms of the deal, SBB will issue 164.6 million class B shares to Aker at 4.25 Swedish kronor (43 cents) each.

In addition, Aker will sell an industrial property portfolio to PPI, in exchange for 124.4 million shares issued at 18.69 Norwegian kroner ($1.79) each.

After the deal, Aker will own around 9.1% of the shares and 4.4% of the votes in SBB, as well as around 24.6% of the shares and votes in PPI.

SBB borrowed heavily to pay for a sprawling portfolio of public property, including social housing, healthcare facilities, schools and government buildings, but has been working to reduce debt after being hit hard by higher interest rates in recent years.

"We believe that [Tuesday's] transaction between PPI and Aker Property Group and the directed share issue from SBB to Aker Property Group will increase SBB's earnings and reduce its debt ratio," SBB Chairman Lennart Sten said.

"This transaction will improve the financial situation of SBB and all its stakeholders."

Shares were 30% higher at 5.19 kronor in afternoon trade. PPI shares were 7.2% higher at 20.45 kroner.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

May 13, 2025 08:55 ET (12:55 GMT)

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