RBC signs deal to buy UK wealth management firm Brewin Dolphin for $2.6 billion | national company


TORONTO — Royal Bank of Canada is expanding its wealth management business in the United Kingdom and Ireland, with an agreement on Thursday to buy British wealth management firm Brewin Dolphin Holdings PLC for around $2.6 billion.

As part of the deal, RBC agreed to pay 515 pence per share for the company which has a network of more than 30 offices and £59 billion in assets under management.

RBC said the deal positions the bank’s wealth management arm as a market leader in the UK and Ireland.

“The UK is a key growth market for RBC, and Brewin Dolphin provides us with an exceptional platform to significantly transform our wealth management business in the region,” said Doug Guzman, Group Head, RBC. Wealth management.

“By combining two highly complementary businesses, we will increase the depth and breadth of our services and position the combined business as a leading integrated wealth management provider for private and institutional clients.”

RBC said the acquisition would increase adjusted earnings per share by about 1% in the first year.

The deal is subject to customary conditions, including regulatory approvals and Brewin Dolphin shareholder approval.

The bank said it expects to close the deal by the end of the third quarter.

Cormark Securities analyst Lemar Persaud said the deal was “a good boost” but thought a deal was more likely to have been done in the United States.

“The price seems reasonable given the (fortunate) nature of the assets,” he wrote in a note. “It’s about strategy with the bank’s expansion of the wealth management franchise.”

Veritas Investment Research has a “sell” rating on RBC, but also views the proposed acquisition as positive.

“Overall, we view the geographic expansion and ramp-up of (RBC’s) wealth management business in the UK and Ireland favourably,” Veritas analyst Nigel D’Souza said in a statement. note.

Coming out of the COVID-19 pandemic, Canadian banks are teeming with capital and Paul Harris of Harris Douglas Asset Management said RBC was in a good position to make more acquisitions.

“I think there’s an opportunity to get bigger and scale and do those things where they feel they have a competitive advantage,” Harris said. “I think RBC feels it has a competitive advantage in asset management.”

This report from The Canadian Press was first published on March 31, 2022.

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