TORONTO (Reuters) - Canadian Imperial Bank of Commerce CM.TO has completed the $5 billion acquisition of Chicago-based PrivateBancorp PVTB.O, which will help it diversify from its domestic market, it said on Friday.
CIBC, Canada’s fifth-biggest lender, has the biggest exposure to the country’s housing markets. Concerns are mounting about falling home prices in Toronto and Vancouver, and the bank has long coveted a major U.S. acquisition.
CIBC Chief Executive Officer Victor Dodig said he had talked about a deal with PrivateBank CEO Larry Richman for almost three years.
“PrivateBank has always been part of our medium- to long-term strategy,” Dodig said in an interview.
The combined U.S. business will be renamed CIBC beginning in the fourth quarter, and Richman will run it as group head for the U.S. region.
Dodig said the bank would focus on integrating the two businesses for the next two years but left an option open to make acquisitions in wealth management.
“There’s so much opportunity to grow it organically,” he said.
CIBC is paying $2.4 billion in cash and the remainder in shares. It expects the acquisition will add to its earnings within three years.
Reporting by Matt Scuffham; Editing by Lisa Von Ahn