BNP Paribas has announced that it has agreed to sell Bank of the West to Bank of Montreal’s BMO Financial Group for a total of $ 16.3 billion.
The sale represents all of BNP Paribas’s commercial and retail banking activities in the United States. About 70% of Bank of West deposits are in California.
The Wall Street Journal reported that the two companies are in advanced discussions this morning.
The French bank said the deal would generate a one-off capital tax, net of taxes, of 2.9 billion euros and increase the capital adequacy ratio by 170 basis points.
BMO also announced that the deal will increase its earnings per share as soon as it is completed, and more than 10% in 2024, including cost synergies.
The deal will be financed mainly through surplus capital in the balance sheet of the combined entities at the close, BMO said.
BNP Paribas has stated that it plans to proceed with an extraordinary purchase of own shares to offset the expected erosion of earnings per share under the agreement.
The remaining revenue of the deal, estimated at 7 billion euros, will be redistributed to accelerate organic growth, especially in Europe, to make targeted investments and acquire value-added businesses, BNP Paribas said.
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Source From: Capital
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