Two banks to combine as acquirer drives forward domestic growth plan
Two Canadian banks are to become one as National Bank of Canada and Canadian Western Bank announce a definitive agreement for the former to acquire the latter.
The deal values CWB at around $5 billion and will bring together the two entities’ complementary businesses to add scale nationwide while retaining a regionally focused service model. CWB shareholders will own around 10.5% of National Bank shares when the transaction closes.
“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 Laurent Ferreira, President and CEO of National Bank. “CWB has developed an attractive banking franchise with a reputation for exceptional service with deep customer relationships across a number of priority industries and service lines.”
Ferreira added that the combination will enable investment and innovation in technology and products and services, unlocking significant value creation opportunities.
CWB has around $37 billion in loans and will increase National Bank’s commercial banking portfolio by approximately 52%, adding domestic earning power and enhancing loan and revenue diversification.
Among the terms of the agreement announced late Tuesday:
“Each CWB Share, other than those held by National Bank, will be exchanged for 0.450 of a common share of National Bank. Based on the 20-day volume weighted average trading price of the National Bank Shares on the TSX as of June 11, 2024, the Exchange Ratio values each CWB Share at $52.24, representing a 110% premium to the closing price of the CWB Shares on the TSX of $24.89 as of June 11, 2024, and a 100% premium to the volume weighted average trading price of the CWB Shares over the last 20 days.”
CWB directors and board have determined that the offer is in the best interests of the bank and is fair to its shareholders. The transaction is subject to approval of 662/3% of the votes cast by CWB shareholders at a special meeting of shareholders, expected to be held in September 2024 to approve an amendment to CWB’s by-laws to provide for the share exchange.
“We are proud to come together with National Bank and are confident that this combination will create incredible value for our clients, teams, communities and our shareholders. Together, we can offer Canadians more choice by combining CWB’s four-decade legacy of serving business owners and their families with National Bank’s scale, complementary market expertise and the technological capabilities necessary to accelerate our growth,” said Chris Fowler, CEO of CWB. “Our two organizations share similar values grounded in an unwavering commitment to our clients, a deep history of entrepreneurship and a commitment to giving back in the communities we serve. We’re excited to build on this legacy together.”
The transaction is expected to close by the end of 2025, subject to approval by CWB shareholders and receipt of required regulatory approvals.
