CIBC to sell majority stake in FirstCaribbean to GNB Financial for US$797M

TORONTO — CIBC has agreed to sell a large portion of its investment in CIBC FirstCaribbean to GNB Financial Group Ltd. for US$797 million.

Upon closing of the transaction in 2020, GNB will own 66.7 per cent of FirstCaribbean's equity, while CIBC will retain 24.9 per cent.

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CIBC will receive about US$200 million in cash and provide secured financing for the rest.

GNB Financial is wholly owned by Starmites Corp., the financial holding company of the Gilinski Group, which has about US$15 billion in combined assets.

CIBC 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.

CIBC expects to record an after-tax loss on the transaction of about C$135 million in the fourth quarter ended Oct. 31. Upon closing, CIBC expects to realize foreign currency translation gains estimated at C$280 million.

This report by The Canadian Press was first published Nov. 8, 2019.

Companies in this story: (TSX:CM)

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