NEW YORK (AP) — Royal Bank of Canada plans to boost its services for wealthy clients by paying about $5.4 billion in cash and stock to buy U.S.-based City National.
City National is a Los Angeles wealth management company and lender that serves high net worth individuals and businesses. RBC, based in Toronto, has offices around the U.S. About 8,000 of its 78,000 employees work in the U.S. When the deal closes, which is expected to happen in the fourth quarter, City National will be combined with RBC's U.S. wealth management unit.
RBC said Thursday that it will pay $2.7 billion in cash and about 44 million of its own shares. RBC said the deal values City National's stock at about $93.80 per share, a 25.8 percent premium over Wednesday's closing price.
City National said it has $32.6 billion in assets and manages or administers $60.8 billion in client investment assets. It runs 75 branches in San Francisco, New York, Atlanta and other cities.
Shares of City National Corp. jumped $14.11, or 18.9 percent, to close at $88.68 Thursday. RBC shares fell $1.28, or 2.1 percent, to close at $60.26.