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BNP Paribas to sell its American subsidiary Bank of the West

2021-12-20T08:18:14.991Z


The agreement reached with the Bank of Montreal fixes the amount of the sale at 16.3 billion dollars.


BNP Paribas announced in a press release on Monday that it had reached an agreement with the Bank of Montreal (BMO) to sell its American subsidiary Bank of the West, for an amount of $ 16.3 billion.

The operation should be carried out "

formally during the year 2022, subject to the usual conditions precedent

", it is specified, while several media had reported in recent weeks of the search by the French bank for a buyer potential for this subsidiary which it took control in 1979.

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Several media had reported in recent weeks of the search by the French bank for a potential buyer for this subsidiary which it took control in 1979. The Wall Street Journal had announced Sunday that BNP Paribas was in advanced discussions with BMO for him divest Bank of the West.

"Net capital gain of 2.9 billion euros"

According to the press release Monday, the agreement relates to "

the sale of 100% of the commercial banking activities in the United States operated by its subsidiary Bank of the West, for a total price consideration of 16.3 billion US dollars, or an amount equivalent to approximately 14.4 billion euros, paid in cash upon completion of the transaction

”. This sum "

represents 1.72 times the value of the tangible net assets of Bank of the West, and 20.5% of the market capitalization of BNP Paribas, for an average contribution of Bank of the West to the group's pre-tax income. over the past few years by around 5%

, ”he said.

"

The operation should generate when it is completed an exceptional capital gain (net of tax) estimated at around 2.9 billion euros

," the press release added.

This operation creates value for all parties;

it underlines the quality of Bank of the West

”, summarized Jean-Laurent Bonnafé, director general of the group, quoted in the press release.

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In addition, the establishment of BNP Paribas in the United States remains a strategic pillar for the development of our corporate and institutional franchises.

With this transaction, BNP Paribas confirms its commitment to create long-term value for all of its stakeholders

, ”he said.

Regarding the financial details of the transaction, BNP Paribas indicates that it plans to make “

an extraordinary distribution in the form of share buybacks after the completion of the transaction in order to offset the expected dilution of net earnings per share.

As an indication, a share buyback program of around 4 billion euros would completely neutralize the dilution of net earnings per share

”.

Source: lefigaro

All business articles on 2021-12-20

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