The deal has to be cleared by banking and competition watchdogs, but the process is expected to be concluded by mid-2017.
In a statement released on Thursday, the two banks say they offer roughly similar corporate banking services and by merging their operations will be able to solidify their position in the market.
Nordea boasts strong positions among big business clients, while DNB works successfully with medium and small businesses, according to the press release. Moreover, while Nordea has a strong standing in Estonia, DNB boasts a solid market share in Lithuania.
Nordea and DNB employ 1,300 and 1,800 people in the Baltic states and their assets are valued at €8 billion and €5 billion, respectively.