|
|
|
|
||
BMO Financial Is Buying BNP Paribas' Bank of the West for $16.3 BillionBMO Financial Is Buying BNP Paribas' Bank of the West for $16.3 BillionEnglish, Carleton.Barron's (Online); New York The year may be winding down but bank merger activity continues. Canada-based BMO Financial Group (ticker: BMO) announced Monday it reached an agreement with BNP Paribas (BNP.PA) to acquire Bank of the West for $16.3 billion. BMO said the transaction will help it to expand its footprint in the U.S. as it will soon have a presence in 32 states and will gain 1.8 million customers. Roughly 70% of Bank of the West's deposits are based in California. "This acquisition will add meaningful scale, expansion in attractive markets, and capabilities that will enable us to drive greater growth, returns and efficiencies," Darryl White, chief executive officer of BMO, said in a statement. Bank of the West has more than 500 branches and had $56 billion of loans and $89 billion of deposits as of its third quarter. BMO shares slid 2.7% on Monday while BNP shares rose 0.6%. Bank mergers have been announced at a rapid clip in 2021 . There are several reasons for the tie-ups. Smaller banks have joined up with peers, hoping that larger scale will allow them to invest in digital service options and better compete with larger banks. Meanwhile, larger banks have acquired smaller banks in the hopes of expanding their service offerings or gaining a presence in new regions. Some of the deals recently announced include First Citizens BancShares (FCNCA) $2.2 billion acquisition of CIT Group (CIT), which was just granted regulatory approval . M&T Bank (MTB) and People's United Financial (PBCT) are set to merge, while Citizens Financial Group (CFG) has been on an acquisition streak , acquiring Investors Bancorp (ISBC) and HSBC Holdings East Coast retail operations. As for BMO's designs on Bank of the West, the Canadian bank expects that the merger will boost earnings immediately and will be more than 10% accretive to earnings in 2024. BNP said it will use the proceeds from the deal to do share buybacks to compensate shareholders and will develop more in Europe. The deal is expected to close by the end of 2022, subject to regulatory approvals. |
return to message board, top of board |