- The Competition Bureau has approved Royal Bank of Canada’s (TSX:RY) proposed acquisition of HSBC Bank Canada
- The bureau says the acquisition is unlikely to substantially harm competition in the banking sector and called this “a loss of rivalry between Canada’s largest and seventh largest banks”
- HSBC agreed to sell its banking business to RBC for C$13.5 billion in cash is is expected to generate an estimated pre-tax gain for HSBC of C$7.7 billion
- RBC stock closed trading at C$122.86 per share
The Competition Bureau has approved Royal Bank of Canada’s (TSX:RY) proposed acquisition of HSBC Bank Canada.
In a report, the bureau said the acquisition is unlikely to substantially harm competition in the banking sector. However, the bureau admitted that the financial services market remains very concentrated in Canada and called this “a loss of rivalry between Canada’s largest and seventh largest banks.”
HSBC agreed to sell its banking business to RBC for C$13.5 billion in cash back in November 2022. The sale is expected to generate an estimated pre-tax gain for HSBC of C$7.7 billion.
The deal is still subject to approval from the finance ministry, who will weigh it with the 1,500 submissions it received when it called for public correspondence from all stakeholders.
The last time a banking acquisition of this size was attempted, was the RBC / BMO merger of the 1990s.
While RBC stock was up nearly a per cent trading at C$122.86 per share by Friday’s close, this wouldn’t be the first time that things fell through at the last minute.
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