CIBC cancels sale of FirstCaribbean bank after regulators nix deal
Bank had planned to sell most of FirstCaribbean for $797 million
CIBC says the sale of a large portion of its majority stake in CIBC FirstCaribbean to GNB Financial Group Ltd. will not go ahead after it did not receive approval from regulators.
The Canadian bank had announced in November that it would sell a controlling stake in the bank for $797 million US.
GNB Financial is wholly owned by Starmites Corp., the financial holding company of the Gilinski Group, which has about $15 billion US in combined assets.
Under the proposed deal, GNB would have owned 66.7 per cent of FirstCaribbean's equity, while CIBC would have retained 24.9 per cent.
FirstCaribbean operates in 16 countries in the region and offers a range of financial services including corporate, retail and business banking as well as wealth management.
It has 2,900 employees in 64 branches and offices.
In a statement, the bank said that regulators that govern FirstCaribbean nixed the deal, not entities in Canada that have authority over CIBC.
"While this transaction would have supported FirstCaribbean's long-term growth prospects, it is only one way of supporting growth for our bank going forward," FirstCaribbean CEO Colette Delaney said in a statement.
"CIBC has held a majority ownership stake in FirstCaribbean for a number of years, and there exists an excellent working relationship with a shared focus on meeting the needs of our clients."