MONTREAL: Royal Bank of Canada is going to buy American financial group City National Corporation, which serves high net worth and commercial clients, for $5.4 billion.
As part of the merger agreement, RBC will pay about $47.25 in cash and 0.7489 of an RBC common share for each share of City National common stock, the bank said in a statement. The total payment will be made out as $2.7 billion in cash and approximately 44 million RBC common shares.
RBC already has a strong presence in the United States, where it employs 8,000 people, including more than 3,000 in New York.
“We’re very enthused about merging with RBC,” said City National chairman and CEO Russell Goldsmith.
RBC’s chief executive Dave McKay said that: “In line with RBC’s strategic goals, we believe this combination creates a powerful expansion platform for focused long-term growth in the country which we view as our second home market.”
The deal is set to close in the fourth quarter of the year subject to regulatory approvals and the approval of City National’s common stockholders.
