National Bank of Canada has cleared a key regulatory hurdle in its proposed acquisition of Canadian Western Bank.
The Montreal-based bank said Thursday it has received the Competition Bureau’s clearance for the deal.
The transaction still requires approval by the Office of the Superintendent of Financial Institutions and the minister of finance.
Canadian Western shareholders voted to approve the deal earlier this month.
National Bank announced an all-stock deal to buy Canadian Western in June in a proposal that valued the Edmonton-based lender at about $5 billion.
The move came as National Bank, the sixth largest in Canada, sets its sight on expanding out west to become a stronger national competitor.
Canadian Western has about 65,000 clients and 39 branches, 30 of which are in British Columbia and Alberta, where National currently has only three in each, compared with 280 in Quebec.
National Bank plans to expand its full-service offerings through CWB, including its digital capabilities for all clients, while also offering wealth management and risk advisory services, areas where it says there is little overlap with CWB.
The deal will also see National expand its lending portfolio outside of Quebec by 37 per cent as it takes on CWB’s $37 billion in commercial-focused loans.
CWB is expected to maintain its branch locations as well as its Edmonton-based leadership and operations.
National Bank has said it expects the costs of carrying out the deal will run about $400 million, while it plans to achieve $270 million in annual cost savings within three years of the acquisition.
To help fund the deal, National Bank secured a $500 million investment from CDPQ, making the Quebec pension fund the second-largest shareholder of National Bank.
The transaction is expected to close by the end of next year.