“We will work with CWB clients to increase banking services and increase investment in Western communities,” said Ferreira.
“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,” said Chris Fowler, chief executive of CWB, in a statement.
The deal will see each CWB share, other than those already held by National, exchanged for 0.45 of a common share of National Bank. The transaction value is $4.7 billion excluding shares owned by National Bank.
It says the exchange ratio values each CWB share at $52.24, representing a 110% premium to Tuesday’s closing price of $24.89.
National Bank says it will maintain Canadian Western’s headquarters and two nominees from the bank will join National’s board of directors.
It says it expects the costs of carrying out the deal will run about $400 million, while it plans to achieve $270 million in annual cost savings within three years of the acquisition.
Investment from Quebec pension fund helps secure the deal
To help fund the deal, National Bank secured a $500 million investment from CDPQ, making the Quebec pension fund the second-largest shareholder of National Bank.
The acquisition of CWB is subject to certain customary conditions and must be approved by regulators and two-thirds of Canadian Western Bank’s shareholders at a meeting expected to be held in September.
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