Canada’s BMO Financial Group has signed a definitive agreement with BNP Paribas to acquire its retail & commercial banking businesses in the US for $16.3bn.

The deal will see BMO acquire BNP Paribas’ Bank of the West and its subsidiaries with nearly $105bn in assets as of 30 September 2021.

Founded in 1874, Bank of the West serves retail, small business, commercial and wealth clients.

Through the acquisition, BMO expects to add nearly 1.8 million customers, 514 branches, expand its footprint in 32 states and have the capability to take deposits in all 50 states via a digital platform.

Additionally, the deal will allow it to make scaled entry into California, which has approximately 70% of Bank of the West’s deposits, BMO noted.

The deal awaits regulatory clearance and is expected to close by the end of 2022.

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Post completion, BMO plans to merge Bank of the West into BMO Harris Bank, an indirect wholly-owned Chicago-based subsidiary.

BMO Financial Group CEO Darryl White said: “This acquisition will add meaningful scale, expansion in attractive markets, and capabilities that will enable us to drive greater growth, returns and efficiencies.”

BNP Paribas Group director and CEO Jean-Laurent Bonnafé said: “This is a value accretive transaction for all sides, which emphasizes the quality of Bank of the West franchise. Moreover, BNP Paribas’ set-up in the United States remains a strategic pillar for the development of our Corporate and Institutional franchise.”

French lender BNP Paribas plans to use the proceeds for its share buyback programme and invest the remaining in technology and acquisitions with a focus on Europe.