City National Bank Has New Ownership
Royal Bank of Canada (RBC), Canada’s largest bank, completed the acquisition of City National Corporation last week (Nov. 2). The deal had been approved by the boards of both companies and announced in January of this year.
Calling the acquisition a major milestone for both City National Bank and RBC, Dave McKay, President and CEO, RBC says, “City National is a great addition to RBC. I’m excited about combining our capabilities to deepen client relationships and to serve a broader client base with the aim of being the preferred provider in the U.S. to corporate, institutional, commercial and high-net worth clients and their businesses. Ultimately, our strategy is underpinned by a foundation of helping clients thrive, communities prosper and employees succeed.”
“We will continue to operate essentially as we do today and continue to grow,” says Diane Pearson, City National’s Sr. VP, Entertainment Division.
City National Sr. VP and Team Leader, Lori Badgett adds, “City National found the ideal partner in Royal Bank of Canada and this compelling combination will allow us to preserve and enhance what we can do for our clients, especially in the music business, and offer more support to the local communities we serve”
Based on the closing price on the New York Stock Exchange of RBC’s common shares on October 30, 2015 of $56.83, the total transaction value is at $5 billion and will be paid with $2.6 billion in cash and 41.6 million RBC common shares. In addition, RBC will issue $275 million of RBC first preferred shares in exchange for all outstanding shares of City National preferred stock.
RBC previously announced they will combine its U.S. Wealth Management unit and City National into one line of business to be reported as part of the RBC Wealth Management segment. City National CEO Russell Goldsmith will lead the combined line of business from Los Angeles, where City National is headquartered and where it will continue to operate under the City National name.
Goldman says the acquisition marks the start of a new and exciting chapter in City National’s remarkable history adding, “RBC is the ideal partner for us and, over time, we plan to grow market share in the communities and among the industries that our company serves. We also intend to create new opportunities by working closely with RBC’s outstanding U.S. Wealth Management and U.S. Capital Markets businesses. Through this compelling combination, many of RBC’s clients and business-owners, entrepreneurs and their families and companies will gain access to City National’s excellent products, services and colleagues.”
The combined entity will include approximately 2,100 financial advisors in the U.S. with U.S.-based client assets of $336 billion in wealth and asset management.
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