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Banking Consolidation as Canadian Western Bank is Acquired

Banking | Jun 13, 2024

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National Bank to Purchase Canadian Western Bank for $5 Billion in Shares

The National Bank of Canada has announced that it's reached a final deal to purchase Canadian Western Bank (CWB) for $5 billion in an all-share transaction where every CWB share will be swapped at a National Bank share price of $0.450. The purpose of the acquisition is to improve National Bank's banking services across Canada, and in particular in Western Canada.

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  • With 39 branches, CWB has a substantial presence in Western Canada, where the acquisition expands National Bank's network.
  • Combining assets and resources of the two banks will provide consumers with cutting better tech and a wider choice of financial products and services.
  • The National Bank projects $270 million in pre-tax cost and funding synergies every year.
  • Following the announcement, CWB shares increased by more than 20%, demonstrating strong investor confidence in the deal's strategic advantages.

Regulatory Approvals Required

The Financial Consumer Agency of Canada (FCAC), Competition Bureau, and Office of the Superintendent of Financial Institutions (OSFI) must all provide their regulatory approvals before the acquisition can proceed. It is anticipated that the deal would close by the end of 2025.

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Laurent Ferreira, President and CEO of National Bank:

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.  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. This combination will provide customers with access to a broader range of services, expertise and products, along with the benefits of supporting technological investment and innovation."

Banking Industry Consolidation

The banking industry continues to consolidate as it seeks efficiencies and scale in a competitive market.  Other recent mergers include RBC's acquisition of Canadian division of HSBC (2024) - see sale completed, and Scotiabank buying ING Direct (2012).  These trends highlight the importance of strategic alliances and mergers to expand and preserve competitiveness.

Chris Fowler, CEO of CWB:

"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.”

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National Bank's position in Canada is strengthened by this strategic merger, which also offers the promise of improved services and significant cost savings.

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