National Bank of Canada (NA) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition creates a coast-to-coast competitor, expanding national reach and accelerating domestic growth, especially in Western Canada.

• Increases commercial loan book by over 50% and diversifies revenue, with P&C revenue rising to 45% of total.

• Leverages complementary geographic, business, and technological strengths to deepen client relationships and expand offerings.

• Strong cultural alignment and disciplined approach to risk management, with a commitment to invest in Western Canada.

• Maintains Western headquarters and branch network, with two CWB nominees joining the board.

Financial terms and conditions

• National Bank to acquire all CWB shares via share exchange at a fixed ratio of 0.45 National Bank shares per CWB share, valuing CWB at $5.0 billion ($4.7B net of shares owned), or $52.24 per CWB share.

• CWB shareholders will own about 10.5% of National Bank post-transaction.

• Transaction expected to close by end of 2025, subject to regulatory and CWB shareholder approvals.

• Concurrent $1 billion equity raise split between private placement and public offering to support capital levels.

• Termination and reverse termination fees of 4% of CWB equity value apply under certain circumstances.

Synergies and expected cost savings

• Identified $270 million in pre-tax annual cost and funding synergies, fully realized by year three post-close.

• Cost savings to be achieved ~50% by end of year 1, ~75% by year 2, and fully realized by year 3.

• Synergies driven by technology, infrastructure, automation, and consolidation of centralized functions.

• Pre-tax integration costs of $400 million expected over two years, with 50% at closing, 30% at year 1, and 20% at year 2.

• Revenue opportunities identified but not included in accretion metrics.