BMO is now in advanced talks with BNP, to acquire the US arm, as the newspaper cited sources familiar with the matter. According to WSJ, the Canadian investment banking company could finalise an agreement as soon as this week, shoring up its stateside presence with the West unit. Data published by the Federal Deposit Insurance Corp. show that as of 30 September, Bank of the West had a book value of about US$13.7 billion. However, as of late, regulators in the United States have been slow to approve bank mergers, which would potentially complicate the talks with BMO.
The news of the potential deal was reaffirmed by the Financial Post, which also cited people who did not want to be identified discussing confidential information. The sources told the business newspaper that deliberations are ongoing and that there is no certainty that an agreement will be reached with the Bank of Montreal. This leaves room for other potential contenders to enter into a deal with the French lender to acquire the Bank of the West.
If BMO is successful in its bid, the deal would be the latest in a series of foreign exits from US banking, as lenders from countries like Spain, Japan and Israel who are taking advantage of a hot deals market to unload non-core franchises. Meanwhile, Canadian lenders are looking to expand their footprint in the neighbouring United States, since their own banking market remains stable but lacks strong growth potential.
