((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Adds details throughout) by Nivedita Balu and Manya Saini
The National Bank of Canada
NA.TO said Tuesday it would buy Alberta rival Banque Canadienne de l’Ouest CWB.TO in a C$5 billion ($3.63 billion) deal, combining the sixth and eighth-largest lenders in the country respectively and giving the Quebec-based bank coast-to-coast exposure.
The deal is the latest in Canada’s highly regulated and saturated banking sector, dominated by the big six lenders. Earlier this year, the country’s largest bank, Royal Bank of Canada RY.TO, acquired HSBC’s Canadian operations.
CCB, founded in 1984, focuses on commercial banking services specializing in equipment financing, trust services and wealth management, with 39 branches and 65,000 clients in Canada, concentrated in Alberta and British Columbia. Its loan portfolio of C$37 billion increases National Bank’s loan portfolio outside Quebec by 37%, the banks said.
“This transaction is about growth…and supports our objectives in Western Canada and across the country,” said National Bank CEO Laurent Ferreira.
Many Canadian banks have sought to expand outside the country, usually by acquiring regional banks south of the border. Montreal-based National Bank has focused on opportunities within the country, deriving about a third of its revenue from capital markets.
The price of C$52.24 per share represents a 110% premium to CCB’s closing price on Tuesday. The banks said that each CCB share will be exchanged for 0.450 ordinary shares of the National Bank.
The transaction is expected to close by the end of 2025, subject to CCB shareholder and regulatory approval.
Caisse de dépôt et placement du Québec, Canada’s second-largest pension fund, said it would invest C$500 million to complete the acquisition, which would make it National Bank’s second-largest shareholder.
($1 = 1.3756 Canadian dollars)
