National Bank of Canada to Acquire Canadian Western Bank in C$5 Billion Deal

By Ben Glickman

National Bank of Canada agreed to acquire Canadian Western Bank in a share-swap deal worth about 5 billion Canadian dollars ($3.63 billion).

The companies said Tuesday that the deal would bring together two complementary banks with growing businesses and would allow the combined entity to offer better products and services at a national scale.

The deal, under which each Canadian Western share would be exchanged for 0.45 share of National Bank, gives Canadian Western shares a value of C$52.24 apiece. The companies said that exchange ratio represented a 100% premium on the 20-day volume weighted average trading price for Canadian Western.

Canadian Western Bank holds about $37 billion in loans and has 39 branches located in Western Canada and Ontario. The companies said the combination would increase National Bank's commercial banking portfolio by about 52%.

The merger is expected to boost adjusted per-share earnings through cost and funding synergies, the companies said. National Bank said it had identified $270 million in pretax annual cost and funding synergies.

The deal is subject to approval by two-thirds of Canadian Western shareholders at a special meeting. The merger is expected to close by the end of 2025.

National Bank said it was planning to launch a public offering and a concurrent private placement of subscription receipts connected to its acquisition, with expected gross proceeds of about C$1 billion. That cash is expected to be used to maintain strong regulatory capital ratios after the deal closes and to fund the consideration and expenses under the deal.

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(END) Dow Jones Newswires

06-11-24 1706ET