What’s the Latest on the National Bank and CWB Deal?

In June, National Bank of Canada formalized its proposal to buy Edmonton-based Canadian Western Bank (CWB) — a key step toward its plan to expand outside of the Quebec market.

🤓 Nerdy Tip: If you’re a CWB customer, your day-to-day banking will likely remain the same until the end of 2025. Operational changes depend on the Minister of Finance’s approval and the successful closure of the agreement, a process that could take several months. NerdWallet will update this page as more information becomes available.

National Bank and CWB deal: Merger or acquisition?

A merger is typically a mutual consolidation of two or more companies resulting in the formation of a new organization. The companies leverage combined resources to gain a competitive edge and boost shared profitability.

An acquisition is when a company absorbs one or more companies, either by buying shares or assets, to expand its own operational presence, market share or business scope.

In this case, National Bank will purchase Canadian Western Bank’s shares to integrate CWB’s operations into its own structure. Based on the nature of this transaction, the NBC and CWB deal is best defined as an acquisition.

National Bank to take over CWB

The National Bank and Canadian Western Bank’s share exchange deal is valued at approximately $5.0 billion.

National Bank is one of Canada’s Big Six banks, with approximately $454 billion in total assets as of July 2024. Most of its 360+ branches are limited to Quebec.

CWB, while not part of the Big Six, has branches in British Columbia and Ontario, and mainly serves personal and small-to-medium business clients. As of the third quarter of 2024, CWB reported total assets of $42.5 billion.

“This transaction is about growth and brings together two great banks with a complementary footprint in personal and commercial banking, and supports our objectives in Western Canada and across the country,” said Laurent Ferreira, the president and CEO of National Bank, in the press release announcing the acquisition. Through this deal, National Bank aims to expand its banking and wealth management offerings while serving new regional markets.

Where the deal stands now

June 11, 2024: Both financial institutions entered into a definitive agreement for National Bank to acquire Canadian Western Bank. CWB will become part of the National Bank.

September 3, 2024: CWB held a meeting to seek shareholders’ approval of National Bank’s proposal to buy all of the issued and outstanding CWB Shares by way of a share exchange.

99.78% of CWB Shareholders voted in favour of this transaction.

September 25, 2024: Competition Bureau Canada issued a “No Action Letter (NAL),” granting clearance to the National Bank for the proposed acquisition of CWB.

“This decision preserves the tremendous value the transaction represents for our clients, teams, communities and shareholders,” Chris Fowler, CEO of CWB said in a statement.

October 16, 2024: National Bank and CWB announced CWB’s tier 1 capital reorganization.

The reorganization of financial instruments, such as preferred shares and Limited Recourse Capital Notes (LRCNs) will help align CWN’s capital structure with National Bank’s. This process will facilitate a smoother integration post-acquisition.

(These reorganization amendments, which required consent from 66⅔% of eligible CWB preferred shareholders, were approved on Nov. 28, 2024.)

November 5 – 19, 2024: The Department of Finance launched consultations to help inform the Minister of Finance’s decision on National Bank’s proposed acquisition of CWB.

The consultation invited personal and business clients, employees, and interested Canadians to share their views and feedback on the topic. While this process has ended, Canadians can still email their concerns and comments to the Department of Finance ([email protected]).

What’s next?

The Minister of Finance will review the recommendations from the Superintendent of Financial Institutions (OSFI), and the feedback from Canadians and stakeholders, to help inform decisions about the proposed acquisition.