CIBC World Markets is selling its U.S. Oppenheimer private client and asset management division to New York brokerage house Fahnestock Viner Holdings in a $400 million deal that will give CIBC the right to acquire more than a third of Fahnestock.
CIBC Oppenheimer manages client assets of $35 billion US and has annual revenues of $350 million US.
"The combination of CIBC's private client and asset management divisions with Fahnestock will create an entity that has the scale and operational efficiencies necessary to be a strong wealth management competitor within the U.S. market," CIBC Wealth Management vice-chair Gerry McCaughey said in a statement.
"By obtaining the right to acquire an interest in Fahnestock, CIBC will have an opportunity to participate in the future growth and operating leverage of this combined business," he said.
Under terms of the deal, CIBC will have the right to acquire up to 35 per cent of Fahnestock's issued shares.
Fahnestock said it will operate the acquired business under the name Oppenheimer & Co., the name it had before CIBC bought the company in 1997.
Fahnestock said the transaction would place it in the top 10 independent full service retail broker-dealers in the United States, based on financial consultants and client assets.
The deal comes as CIBC struggles with major write-downs and a restructuring that led to a $100 million loss in the fourth quarter. CIBC also decided to exit the U.S. electronic banking operations of Amicus.