PARIS (Reuters) -BNP Paribas, France's biggest listed bank, said on Wednesday that it had received all the necessary regulatory approvals to complete its previously announced sale of Bank of the West to Bank of Montreal.
BNP Paribas added that this transaction was expected to close on Feb 1.
Bank of Montreal agreed in December 2021 to buy BNP Paribas' U.S. unit, Bank of the West, for $16.3 billion in its biggest deal ever, allowing the Canadian lender to double its footprint in the world's biggest economy, while giving BNP a huge step up in financial firepower for deals.
"The closing of the Bancwest sale has been long-awaited ... and is a significant positive catalyst for BNP shares in our view," Jefferies analysts said in a note.
They said the deal would unlock 11 billion euros of capital for the French bank, of which 4 billion would be returned to shareholders via a share buy-back that could take place in the second quarter of this year.
Meanwhile, for BMO, the acquisition is expected to offer it a large-scale presence in California, driving customer growth in a key lucrative market of the United States.
Once the deal closes, it will bring nearly 1.8 million commercial, retail, wealth management and business banking customers and over 9,300 Bank of the West employees to BMO.
Canada's top six lenders control the majority of domestic banking operations, and they have been accelerating their expansion into the more fragmented U.S. market, helped by billions of dollars in excess capital. The cash-rich Canadian banks, are now looking to tap growth opportunities in new North American markets, away from their largely saturated home turf.
Last year, rival Toronto-Dominion Bank Group also announced a deal to buy First Horizon Corp for $13.4 billion in cash to expand its footprint in the southeastern United States.
(Reporting by Sudip Kar-Gupta and Silvia Aloisi and Manya Saini in Bengaluru editing by Jason Neely and Chizu Nomiyama)