A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto in this January 22, 2015 file photo.MARK BLINCH/Reuters
DEAL OF THE DAY
RBC opens new chapter as City National deal closes
It's the largest-ever acquisition by Canada's largest bank – and since the $5-billion (U.S.) deal was made back in January, Royal Bank of Canada has been keen to point out it is by no means an effort to revisit its U.S. retail-banking strategy, which it sold in 2011.
Monday marked another step in the bank's U.S. journey.
As the deal closed, RBC chief executive officer Dave McKay told The Globe and Mail's David Berman that he sees strong potential for expansion at City National. RBC expects that the bank can generate significantly stronger growth in the years ahead with assistance from RBC's larger assets and strong capital markets capabilities.
"They've nurtured and grown a number of high-tech and entertainment franchises that have grown up and gone to Goldman Sachs and JPMorgan for that larger, full-service universal bank capability," Mr. McKay said. With RBC's assistance, he believes, City National can now hold on to these clients and win some back.
The cost of the bank's long-term ambitions? Don't expect share buybacks in the near future.
The deal will reduce RBC's common equity Tier 1 ratio – a measure of financial strength watched closely by regulators – by or 0.7 percentage points.
"When I talk to our shareholders, and particularly our large shareholders, they have a long-term view," Mr. McKay said. "They're thinking in years, and therefore they look at the opportunity for RBC to grow in the U.S. market. This is an exciting transaction that transcends what's going to happen over the next two quarters." Full Story
MERGERS AND ACQUISITIONS
Visa to swipe (sorry) Visa Europe
In a deal valued as high as $23.3-billion (U.S.), Visa Inc. said on Monday it would buy former subsidiary Visa Europe Ltd. Full Story
Dentons looks to grow
International law firm Dentons says it is discussing mergers with 500-lawyer Australian firm Gadens and 200-lawyer Singaporean firm Roydk & Davidson. Full Story
INITIAL PUBLIC OFFERINGS
Fitbit plans stock offer, shares fall
Shares in the wearable-tech superstar have more than doubled since their debut in June. But they fell in after-hours trading Monday when the company said it was planning to sell seven million shares. Full Story
Société Générale to sell stake in asset manager
As part of an IPO that will create Europe's biggest publicly traded asset manager, France's Société Générale SA is selling its 20-per-cent stake in Amundi Group. The deal could raise as much as $1.9-billion (U.S.). Full Story
PRIVATE EQUITY AND VENTURE CAPITAL
Private parts (and wind power)
SORL Auto Parts Inc. and China Ming Yang Wind Power Group Ltd. became the latest U.S.-listed Chinese companies to receive buyout offers, reviving this year's record flow of going-private deals.
Bloomberg has a nice story on the trend that has seen an all-time high of 34 Chinese companies trading on American exchanges receive privatization offers this year. Full Story
Pamplona to buy MedAssets
MedAssets Inc., which provides hospital software, will sell itself to private equity firm Pamplona Capital Management for $1.88-billion (U.S.) in cash. Full Story
Crinetics receives funding
Crinetics Pharmaceuticals, a therapeutics company focused on specialty endocrine disorders, announced the completion of a $40-million (U.S.) Series A financing. Press Release
INSIGHT & ANALYSIS
About that Hydro One report ...
The new narrative for Hydro One's contentious privatization suggests the deal will be bad for Ontario's books. So says the province's budget watchdog in a fresh report.
About that argument.
If you only read the summary, which came out last Thursday, you'd have no choice but to buy this conclusion. By unloading 60 per cent of Hydro One, "the province's net debt would initially be reduced, but will eventually be higher than it would have been without the sale," the auditor states.
Scour the full report and you won't be nearly as convinced of the deal's detrimental debt effects. Over 41 pages, the text offers a much more nuanced take. – Tim Kiladze Full Story
IN CASE YOU MISSED IT
CIBC denies merit of Cerberus suit
Canadian Imperial Bank of Commerce says a lawsuit filed by New York-based private equity giant Cerberus Capital Management LP, alleging that the Canadian lender has defaulted on payments and owes hundreds of millions of dollars, is without merit. Full Story
BMO's global advance
After spending billions of dollars to build a big asset management business, Bank of Montreal is finally keen to show off what it's got – especially its global footprint. Full Story
Know of any coming deals we should cover? Have suggestions for making the Daily Deal Roundup more useful? E-mail us at deals@globeandmail.com.