TORONTO/PARIS—Bank of Montreal said on Monday it will buy BNP Paribas’ U.S. unit, Bank of the West, for $16.3 billion in a deal that will allow the Canadian bank to double its footprint in the world’s biggest economy, while giving France’s biggest bank a huge step up in firepower for deals.
The deal gives BMO, Canada’s fourth-largest lender, a large-scale presence in California, whose population is bigger than the bank’s home country. It will also increase the United States’ contribution to BMO’s pre-provision, pretax earnings to 44 percent from 36 percent in fiscal 2021 and will give the Canadian bank the ability to deploy almost all of its excess capital, which has been a drag on returns.
