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For Businesses In latin America, I will try to keep politics out of the postings that I will do on Latin America Businesses.




CIBC to pay US$1.1B for controlling stake in FirstCaribbean International Bank


Canadian Press

Published: Monday, March 13, 2006

TORONTO (CP) - The Canadian Imperial Bank of Commerce (TSX:CM) has tentatively agreed to buy a majority stake in FirstCaribbean International Bank for nearly $1.1 billion US.


CIBC said Monday it has signed a non-binding letter of intent with Barclays Bank PLC to acquire the British bank's 43.7 per cent stake in FirstCaribbean. After the deal, CIBC would own 87.4 per cent of FirstCaribbean, the largest regionally traded bank in the English-speaking Caribbean.


The transaction is expected to cost $1.62 US a share, with a total value of $1.08 billion US.


CIBC has a long-standing presence in the Caribbean, where it opened its first branch in 1920 and acquired its current stake in FirstCaribbean when its Caribbean operations were merged with those of Barclays to form FirstCaribbean in 2002.


"With its established retail, wealth management, corporate and capital markets businesses, FirstCaribbean is an excellent fit for CIBC and is well-positioned for long-term success in a region that we believe has attractive growth prospects," Gerry McCaughey, CIBC's president and chief executive, said in a release before stock markets opened.


"We have enjoyed our partnership with Barclays in building a strong leader in the Caribbean financial services industry and we are committed to FirstCaribbean's strength and success."


The transaction is expected to close late this year and is subject to completion of due diligence and the negotiation and execution of a definitive agreement. The transaction may also face regulatory approvals.


Under terms of the deal, CIBC will have the option of paying for the transaction through cash, CIBC common shares or a combination of cash and shares.


"FirstCaribbean has performed well since the local businesses of Barclays and CIBC were combined in 2002," said Naguib Kheraj, group finance director of Barclays PLC.


"The merger has created value for all shareholders in FirstCaribbean as well as benefits for customers and the regional economy. With the integration of the businesses complete, FirstCaribbean is now well positioned for its future development. Barclays and CIBC both believe that the future strategy of FirstCaribbean is best pursued with one controlling shareholder and we are pleased that we have reached this preliminary agreement."


FirstCaribbean is listed on the Barbados, Jamaica, Trinidad and Tobago and the Eastern Caribbean Stock Exchanges and has assets of more than $9.6 billion US and more than 3,400 employees and 100 branches and financial centres across the region.


© The Canadian Press 2006

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