RBC signs deal to buy British wealth management firm Brewin Dolphin for $2.6 billion

TORONTO — Royal Bank of Canada is rising its wealth administration business in the United Kingdom and Ireland, with a offer Thursday to acquire British wealth administration company Brewin Dolphin Holdings PLC for about $2.6 billion.

Under the deal, RBC has agreed to pay 515 pence for every share for the corporation which has a network of extra than 30 places of work and 59 billion lbs in assets less than management.

RBC mentioned the deal positions the bank’s wealth management arm as a industry chief in the U.K. and Ireland.

“The U.K. is a critical expansion sector for RBC, and Brewin Dolphin offers us with an outstanding platform to appreciably renovate our prosperity administration business in the location,” reported Doug Guzman, group head of RBC Wealth Administration. 

“By combining two really complementary companies, we will maximize the depth and breadth of our services and posture the mixed company as a leading integrated prosperity management service provider to personal and institutional customers.”

RBC claimed the acquisition will grow modified earnings-for every-share by about one for every cent in the to start with year.

The agreement is subject matter to customary problems, which include regulatory approvals and Brewin Dolphin shareholder acceptance.

The financial institution explained it expects to shut the deal by the finish of the third quarter.

Cormark Securities analyst Lemar Persaud explained the deal is “a great bolt-on,” but imagined a deal was much more most likely to have been in the United States. 

“The cost appears fair specified the (substantial-net-worth) mother nature of the belongings,” he wrote in a notice. “It is really on technique with the bank’s expansion of the wealth administration franchise.”

Veritas Investment Study has a ‘sell’ rating on RBC, but also sees this proposed acquisition as a favourable. 

“In general, we check out the geographic expansion and scale-up of (RBC’s) wealth company in the U.K. and Eire favourably,” explained Veritas analyst Nigel D’Souza in a take note.

Coming out of the COVID-19 pandemic, Canadian financial institutions are flush with money and Harris Douglas Asset Management’s Paul Harris mentioned RBC is in a good posture to make far more acquisitions.

“I feel there’s an opportunity to come to be bigger and seize scale and to do these matters wherever they really feel like they have a aggressive edge,” Harris reported. “I consider RBC feels like they have a aggressive edge in asset administration.”

This report by The Canadian Press was first released March 31, 2022.

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Adena Ali, The Canadian Press