Bank of Montreal has agreed to buy BNP Paribas’ U.S. banking subsidiary, Bank of the West, for $16.3 billion in cash.
The deal, announced Monday, would expand the presence here of one of Canada’s largest banks by combining the $105 billion-asset Bank of the West in San Francisco with the $162.3 billion-asset BMO Harris in Chicago.
The parties are giving the deal, which is one of the industry’s biggest this year by combined assets, until the end of 2022 to close.
Federal regulators
While some lawmakers have asked banking regulators for a moratorium on large M&A deals until the policy matters can be ironed out, the Fed
The sale of Bank of the West would mark the
“This acquisition will add meaningful scale, expansion in attractive markets, and capabilities that will enable us to drive greater growth, returns and efficiencies," BMO Financial Group CEO Darryl White said in a press release unveiling the deal.
The purchase price is estimated to be 1.5 times the book value for Bank of the West. BMO would gain about $56 billion of loans and $89 billion of deposits. BMO said it is not planning to close any Bank of the West branches and is committed to retaining its front-line employees.
“Bank of the West’s presence in many of the largest and fastest growing markets in the U.S. provides an ideal and complementary commercial and retail banking platform to fuel BMO's growth,” Bank of the West CEO Nandita Bakhshi said in the release.
The release did not discuss the planned management structure of the combined company, including the role of Bakhshi.
BMO’s capital markets unit and Morgan Stanley were financial advisors on the buyer’s side. BMO retained Wachtell, Lipton, Rosen & Katz as well as Osler, Hoskin & Harcourt as legal counsel.
Goldman Sachs and JPMorgan Chase were financial advisors to BNP Paribas, while Sullivan & Cromwell served as its legal counsel.
