Summary
PNC Financial Services Group, Inc. (PNC) announced on June 20, 2011, that it has entered into a Stock Purchase Agreement to acquire 100% of the shares of RBC Bank (USA) from Royal Bank of Canada (RBC) for $3.45 billion. This strategic acquisition is expected to expand PNC's presence and customer base. The transaction includes a post-closing adjustment based on tangible book value, and PNC has the option to pay a portion of the purchase price in PNC common stock, up to a specified limit. RBC Bank will be merged into PNC Bank, National Association, following the closing of the acquisition. The acquisition is subject to customary closing conditions, including regulatory approvals. Both parties have entered into various covenants related to the operation of RBC Bank prior to closing and post-closing restrictions on competition and employee solicitation. This move signifies PNC's commitment to growth and integration within the banking sector.
Key Highlights
- 1PNC is acquiring 100% of RBC Bank (USA) from Royal Bank of Canada for $3.45 billion.
- 2The purchase price is subject to a post-closing adjustment based on tangible book value.
- 3PNC has the option to pay up to $1 billion of the purchase price using PNC common stock.
- 4RBC Bank will be merged into PNC Bank, National Association, after the acquisition closes.
- 5The transaction is subject to regulatory approvals and other standard closing conditions.
- 6Covenants include operational standards for RBC Bank pre-closing and restrictions on competition and employee solicitation post-closing for both parties.