Butterfield to Acquire CIBC Caribbean in US$1.8Bn Deal

  • Bank of N.T. Butterfield & Son (Butterfield), a Bermuda-based financial services group, has agreed to acquire Canadian Imperial Bank of Commerce’s (CIBC) controlling stake in CIBC Caribbean in a US$1.79Bn transaction that will create a regional banking group with approximately US$29.0Bn in assets.
  • Under the terms of the agreement, Butterfield will acquire CIBC’s 91.7% interest in CIBC Caribbean through the purchase of CIBC Investments (Cayman) Limited, the holding company for the stake. Butterfield will then launch a mandatory offer for the remaining minority shares held by public shareholders, with the aim of securing full ownership of CIBC Caribbean.
  • The transaction consideration comprises US$1.09Bn in cash and US$703.0Mn in Butterfield shares, valuing CIBC Caribbean at US$1.14 per share. Following completion of the deal, CIBC will retain an approximately 22.0% stake in the enlarged Butterfield group and will initially have the right to appoint two directors to Butterfield’s board. The deal is expected to close in the first half of 2027, subject to shareholder and regulatory approvals.
  • “Butterfield and CIBC Caribbean’s expanded capabilities and scale are expected to provide enhanced corporate, personal and wealth management services across their combined client bases,” it stated.
  • “Clients can expect greater ability to process cross-border payments, increased consumer and merchant banking capabilities, and continued investments in technology and digital banking infrastructure,” it stated. Butterfield said it will maintain both organisations’ operational footprints, including CIBC Caribbean’s regional headquarters in Barbados, to ensure continuity for customers and staff.
  • Butterfield chairman and chief executive officer Michael Collins said the acquisition would position the combined group as a leading independent banking and wealth management platform operating across international financial centres and Caribbean markets.
  • To finance the deal, Butterfield has secured commitments for US$700.0Mn in subordinated debt financing that will qualify as Tier 2 regulatory capital. The combined entity is expected to maintain a pro forma Common Equity Tier 1 capital ratio above 12% and total capital above 19% at closing.
  • Butterfield projected that the transaction would deliver double-digit earnings accretion, including a 12.0% increase in GAAP earnings per share and a 15.0% increase in cash earnings per share once synergies are fully realised. The bank also forecast annual pre-tax cost savings of about US$49.0Mn by 2030.

(Source: Trinidad Express)