05:04 PM EDT, 06/11/2024 (MT Newswires) -- National Bank of Canada ( NTIOF ) on Tuesday said it agreed to acquire Canadian Western Bank ( CWESF ) for shares worth $5 billion as it looks to expand its presence in Western Canada.

The bank is offering 0.45 of a share for each Canadian Western share, a 110% premium to that bank's Tuesday closing price on the Toronto Stock Exchange.

National said the acquisition brings CWB's 39 branches in Western Canada and a $37-billion loan portfolio, a 52% increase to National's current commercial loan portfolio. It expects $270 million of pre-tax annual cost and funding synergies.

"CWB has developed an attractive banking franchise with a reputation for exceptional service with deep customer relationships across a number of priority industries and service lines. This combination will provide customers with access to a broader range of services, expertise and products, along with the benefits of supporting technological investment and innovation," National Bank chief executive Laurent Ferreira said in a release.

The deal will see National Bank maintain an executive presence in CWB's home city of Edmonton, Alberta,

The bank will fund its acquisition with a $500-million private placement of 4.45-million subscription receipts priced at $112.30, while Caisse de depot et placement du Quebec agreed to acquire an equal amount of subscription receipts for a further $500 million.

The acquisition is expected to close by the end of 2025.

National Bank shares closed down $1.33 to $116.34 on the Toronto Stock Exchange, while Canadian Western Bank ( CWESF ) shares closed down $0.28 to $24.89.