After being dumped by their American parent company, Merrill Lynch's Canadian retail stock brokers have a new home in the form of one of Canada's biggest banks.

CIBC said late Wednesday that it will pay between $475 million and $650 million, with the final purchase price expected to be between $500 million and $600 million, depending on the number of financial consultants joining CIBC.

CIBC will be offering major bonuses to retain key Merrill staff, who will be prime pickings for other financial institutions looking to scoop up well-connected financial consultants with deep-pocketed clients.

The Merrill Lynch operations will be rolled in with CIBC Wood Gundy. Once combined, the new operation would have a sales force of 1,600 people, including 1,000 from Merrill, and $85 billion in assets, $50 billion of which will come from Merrill.

"With the addition of Merrill Lynch Canada, CIBC Wood Gundy secures its place as Canada's premier retail brokerage firm and assembles one of the largest networks of financial consultants of any private client brokerage organization," CIBC chief executive John Hunkin said in a statement.

"This acquisition is a major building block in CIBC's strategy to grow our wealth management operations," Hunkin said.

CIBC is also buying Merrill's Canadian mutual fund and securities services business. However, the sale does not include Merrill Lynch's corporate and institutional client businesses in Canada, which are unaffected by the move.

CIBC beats out rivals

CIBC emerged victorious from a group of bidders reported to have included TD Canada Trust, Scotiabank, National Bank, and a group of Merrill insiders backed up by the powerful Caisse de depot et placement du Quebec.

Merrill Lynch announced earlier this month that it was exiting the Canadian retail brokerage sector because it wasn't able to attract enough wealthy investors.

The sale marks the second retreat for Merrill Lynch from Canada. A decade ago, CIBC bought a 265-broker network from Merrill, which returned to Canada in 1998 by buying Midland Walwyn Inc. for $1.3 billion.