Canada Royal Bank To Buy Centura
ROCKY MOUNT, N.C. (AP) _ Royal Bank of Canada will acquire Centura Banks in a stock swap valued at $2.3 billion dollars, the banks announced Friday.
The value, the equivalent of 3.5 billion Canadian dollars, is based on Royal Bank’s closing share price on the Toronto Stock Exchange of 51.80 Canadian dollars, or $34.35. Under the terms of the agreement, each share of Centura will be converted into 1.684 shares of Royal Bank on closing of the deal.
The acquisition, which is subject to regulatory approval in both countries, is expected to be completed by midsummer. At that time, Centura will adopt the name RBC Centura Banks Inc.
In connection with the agreement, Centura has granted Royal Bank an option to purchase a number of shares equal to 19.9 percent of outstanding common stock.
John Cleghorn, chairman and chief executive of Royal Bank, said the deal was ``consistent with our U.S. growth strategy, which is based on focused and manageable acquisitions.″
Cecil W. Sewell Jr., Centura chief executive officer, said Royal Bank ``has a stellar reputation and a corporate culture very similar to our own.″
When the transaction is completed, Sewell will become chairman of RBC Centura Banks Inc. H. Kel Landis, now president of Centura, will become chief executive officer of RBC Centura Banks.
Centura Banks has $11.5 billion in assets and 3,600 employees in North Carolina, South Carolina and Virginia. Royal Bank employs 50,000 people in North America and 30 countries abroad.