National Bank of Canada signs C$5bn deal to acquire Canadian Western Bank

National Bank of Canada (TSX: NA) has reached a definitive agreement to acquire Canadian Western Bank (TSX: CWB) in a transformative C$5 billion transaction that promises to reshape the Canadian banking landscape. This strategic move not only enhances National Bank’s footprint across Canada but also solidifies its commitment to providing comprehensive financial services on a national scale.

Strategic Acquisition for Growth

The acquisition involves National Bank taking over all issued and outstanding common shares of Canadian Western Bank through a share exchange, valued at approximately $5 billion, representing a significant premium to CWB’s recent share prices. Specifically, each CWB share will be exchanged for 0.450 of a National Bank share, an arrangement that underscores the strategic importance of this acquisition to both entities.

Laurent Ferreira, President and CEO of National Bank, emphasized the growth potential of this merger: “This transaction 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.” He highlighted the synergistic potential of combining CWB’s strong regional presence with National Bank’s expansive service and technology capabilities.

Enhancing Service Capabilities and Market Reach

The merger will create a robust platform that leverages the strengths of both banks. Canadian Western Bank’s established presence and specialized services in Western Canada complement National Bank’s wide-ranging financial products and technological advancements. This strategic combination is expected to deliver enhanced services to customers through a more extensive network and diversified offerings.

Chris Fowler, CEO of CWB, noted the long-term benefits for stakeholders: “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.”

Investment and Community Impact

The transaction is also a significant investment in the future of the Western Canadian economy, where National Bank has already established a strong presence. With CWB’s focus on small and mid-market businesses, particularly in growing sectors such as equipment finance, the combined entity is poised to become a more valuable partner to Canadian businesses and individuals.

Moreover, the combined bank commits to deepening its involvement in communities across Canada. National Bank plans to double CWB’s community investment program to more than $3 million annually, further supporting local initiatives and contributing to sustainable economic development.

Transaction Details and Approvals

The agreement, endorsed unanimously by the boards of both banks, is slated for closure by the end of 2025, pending regulatory approvals and the approval of CWB shareholders at a special meeting. Notably, the transaction is structured to ensure a smooth integration and continuity of service for all customers.

National Bank has identified $270 million of pre-tax annual cost and funding synergies from the merger, with additional revenue opportunities expected from the expanded operations.