Royal Bank of Canada said 29 November it has reached an agreement to acquire HSBC Canada for $10.1bn in cash.
“This acquisition builds on our core domestic retail business and expands our international product capabilities,” said Neil McLaughlin, group head of personal and commercial banking at RBC.
The deal is expected to close by late 2023 and to add a bank with $134bn in assets as of 30 September, about 130 branches and 4,200 full-time employees.
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The price offers a 9.4 times multiple of HSBC Canada’s estimated 2024 adjusted earnings of $1.4bn assuming fully realised expense synergies, RBC said in a statement.
The deal is expected to boost EPS by 6% based on 2024 consensus estimates.
RBC expects about $740m in annual pre-tax cost synergies and to incur total acquisition and integration costs of about $1bn. Shares were not yet active premarket but are down 7% in the year to date, while the S&P 500 has fallen 17%.
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