The FirstCaribbean International Bank (Jamaica) Limited's head office on Knutsford Boulevard, New Kingston, St. Andrew. - ANDREW SMITH/PHOTOGRAPHY EDITOR
LONDON (Reuters):
CANADIAN IMPERIAL Bank of Commerce (CIBC) said on Monday it is to buy a 43.7 per cent stake in FirstCaribbean International Bank (FCIB) from Britain's Barclays Plc for US$1.08 billion.
The purchase will give the Canadian bank an 87.4 per cent stake in FCIB, which was formed four years ago from the merger of the Caribbean businesses of CIBC and Barclays.
CIBC said it expects the deal to complete late this year. Under the terms of the LOI, CIBC will have the option of paying for the transaction through cash, CIBC common shares or a combination of cash and shares, the makeup of which CIBC will determine before closing.
"FirstCaribbean has performed well since the local businesses of Barclays and CIBC were combined in 2002," said Naguib Kheraj, group finance director of Barclays PLC. "The merger has created value for all shareholders in FirstCaribbean as well as benefits for customers and the regional economy. With the integration of the businesses completed, FirstCaribbean is now well-positioned for its future development. Barclays and CIBC both believe that the future strategy of FirstCaribbean is best pursued with one controlling shareholder and we are pleased that we have reached this preliminary agreement."
The remaining 12.6 per cent of FCIB is publicly held, with the shares listed on the Barbados, Jamaica, Trinidad & Tobago and East Caribbean stock exchanges. FirstCaribbean is the largest regionally-listed bank in the English-speaking Caribbean, with assets of over US$9.6 billion and a market capitalisation of over US$3.3 billion.
CIBC has a long-standing presence in the Caribbean region. It opened its first branch in 1920, and acquired its current ownership stake in FirstCaribbean when its Caribbean operations were merged with those of Barclays to form FirstCaribbean in 2002.
"With its established retail, wealth management, corporate and capital market businesses, FirstCaribbean is an excellent fit for CIBC and is well-positioned for long-term success in a region that we believe has attractive growth prospects," said Gerry McCaughey, CIBC's president and chief executive officer. "We have enjoyed our partnership with Barclays in building a strong leader in the Caribbean financial services industry and we are committed to FirstCaribbean's strength and success."
The conclusion of the transaction, anticipated late in 2006, is subject to the completion of due diligence and the negotiation and execution of definitive documentation. The transaction would also be conditional upon regulatory approvals.
FirstCaribbean has over 3,400 staff, 100 branches and banking centres, and offices in 17 countries comprising: Anguilla, Antigua, The Bahamas, Barbados, Belize, the British Virgin Islands, the Cayman Islands, Curaçao, Dominica, Grenada, Jamaica, St Kitts & Nevis, St Lucia, St Maarten, St. Vincent and the Grenadines, Trinidad and Tobago and the Turks and Caicos Islands. The bank has approximately 780,000 active accounts.
