JOIN US Canada’s No 4 bank said the deal adds to its position in the US Midwest and more than doubles the branch network it runs through its Chicago-based Harris Bank unit.
BMO will issue about C$800 million ($792 million) in new shares to help fund the acquisition. BMO will also purchase M&I’s troubled asset relief programme preferred shares at par plus accrued interest, with full repayment to the US Treasury before the deal closes. It will also buy existing M&I warrants held by the US Treasury. The bank owed $1.7 billion to the government under TARP, a federal programme to shore up financial institutions hit by the global financial crisis.
BMO has accounted for $4.7 billion in expected future losses on M&I’s loan portfolio. Milwaukee-based M&I is Wisconsin’s biggest bank, and the deal would create the 15th-largest banking group by assets in the US, BMO said. M&I has 374 branches and about $52 billion in assets. BMO has 321 US branches and $110 billion in US assets.