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National Bank of Canada (OTCPK:NTIOF) has agreed to acquire Canadian Western Bank (OTCPK:CBWBF) for C$5.0B ($3.6B) in a bid to bolster its domestic growth and expand services for Canadian banking and wealth management clients, it said on Tuesday.
All of CWB’s issued and outstanding common shares of will be acquired by Montreal-based National Bank (OTCPK:NTIOF) by way of a share exchange, valuing CWB at about C$5.0B.
Each CWB share, other than those held by NTIOF, will be exchanged for 0.450 of a common share of NTIOF. National will pay the equivalent of C$52.25 per share for CWB, a premium of 110% over its Tuesday closing price.
With the transaction, CWB will boost National Bank’s (OTCPK:NTIOF) commercial banking portfolio by ~52%, adding domestic earnings power and enhancing loan and revenue diversification.
The deal, which still needs approval of two-thirds of CWB’s shareholders and the Canadian government, is expected to be accretive to adjusted EPS on run-rate cost and funding synergies.
NTIOF has identified C$270M of pretax annual cost and funding synergies, it said, and expects to maintain a CET1 ratio above 12.75% at close.
“This transaction is about growth and brings together two great banks with a complementary footprint in personal and commercial banking, and supports our objectives in Western Canada and across the country,” said National Bank President and CEO Laurent Ferreira.
