(MI) Bank of Montreal Completes Marshall & Ilsley Acquisition

The acquisition of Marshall & Ilsley Corporation (MI) by Bank of Montreal (BMO) finally drew to a close on Tuesday, following BMO’s repayment of $1.715 billion of Troubled Asset Relief Program (TARP) money that M&I had borrowed from the U.S. Treasury in 2008. Along with this repayment, which was a part of the acquisition deal, BMO also purchased $3.3 million worth of warrants that were issued to the U.S. Treasury by M&I and paid $11.9 million as accrued dividends.

The acquired M&I offices (about 190 in total) would be renamed as BMO Harris Bank, after BMO integrates it with Chicago-based Harris Bank, which BMO owns. The integration will likely take nearly 18 months.

Furthermore, M&I’s Chairman and CEO, Mark Furlong, has been named as the president and CEO of BMO Harris Bank. Mr. Furlong commented that within the next  two years, approximately $5 billion will be made available to small and medium businesses in Arizona, Midwest and Florida.

In June, the M&I-BMO acquisition agreement had received all regulatory approvals, following the M&I shareholders’ approval to the merger deal in May. The U.S. Treasury Department had also provided a proxy giving their assent to the merger as it held the Senior Preferred Stock of M&I.

M&I’s buyout by BMO in an all-stock transaction worth $4.1 billion was announced in December 2010. Under the terms of the deal, M&I’s shareholders get 0.1257 share of BMO for each share of the company. The transaction was valued at $7.75 per share or 34% premium to the closing price of the company’s share on December 16, 2010.

The acquisition would enable BMO to increase its presence in the U.S. private banking area. Moreover, with M&I’s institutional trust and asset management businesses, BMO will be able to enhance its global presence. M&I’s inability to ward off its problem assets was taking a toll on its financial results for the last several quarters. So, the merger agreement will likely provide some relief to the investors of M&I as well.

Currently, both M&I and BMO’s shares retain a Zacks # 3 Rank, which translates into a short-term ‘Hold’ rating.

BANK MONTREAL (BMO): Free Stock Analysis Report

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.

Comments

Powered by Facebook Comments


Similar Posts: | | | | Financial | Regional - Midwest Banks

RSS feeds: Bank of Montreal | BMO | Marshall & Ilsley Corporation | MI | Financial | Regional - Midwest Banks |

Other Posts by | RSS Feed for this author