Canadian Banks In $32bn Merger

Canadian Imperial Bank of Commerce and Toronto-Dominion Bank on Friday said they plan to merge in the second-largest corporate marriage in Canadian history.

The C$45.8 billion ($31.9 billion) deal will create a bank with assets of C$460 billion ($320 billion) which will be the 10th largest bank in North America in terms of market capitalisation, the two banks said.

Under the terms of the deal, TD Bank shareholders will get 1.318 CIBC shares for each TD share. The deal will see TD Bank shareholders get 48.5 percent of the combined bank, with CIBC shareholders getting the remainder.

Current TD Bank chief executive Charles Baillie would be the chief executive of the new bank, with CIBC chairman and chief executive Al Flood becoming its chairman. The merged bank will keep the name the Canadian Imperial Bank of Commerce, the banks said.

 

The new bank will have about 74,000 employees and more than 10 million customers worldwide.

The bank would be second in size in Canada only to the still-unnamed bank which would be created by the merger of Royal Bank of Canada and Bank of Montreal proposed in January. The planned BMO-Royal merger would be the biggest in Canadian corporate history, and at current share prices would be worth more than C$50 billion ($34.9 billion). The Boards of Directors of CIBC and TD Bank announced a definitive agreement to combine their operations as equal partners and create a new, Canadian-owned, globally competitive financial services company.

The agreement, which is subject to regulatory and shareholder approval, will bring together two of Canada's most innovative banks with a strong North American focus and highly complementary capabilities in a broad range of financial products and services.

"The entire financial services sector is being dramatically reshaped by the needs of our customers, the accelerating speed of technological change and the emergence of powerful new competitors all over the world. By combining our respective strengths in financial services, people, and technology, we will build a new company that is at the forefront of a strong Canadian-owned financial services industry," said Al Flood.