In a significant development, HSBC Holdings plc provided a crucial update today on the impending sale of its business in Canada, HSBC Canada, to the Royal Bank of Canada (RBC). The Canadian Federal Government’s Minister of Finance has granted approval for the transaction, paving the way for further progress.

The approval, received on December 21, 2023, marks a key milestone as it secures regulatory support for the sale. Both HSBC and RBC are now actively involved in the implementation process, and the transaction is going to be finalized in the first quarter of 2024.

In accordance with the terms outlined in the deal announced in November 2022, RBC is going to acquire 100% of the issued common equity of HSBC Canada for a base cash consideration of CA$13.5 billion (US$10.1 billion). Additionally, RBC will take over all preferred shares and outstanding subordinated debt issued by HSBC Canada, currently held by the HSBC Group, for approximately CA$1.1 billion (US$0.8 billion) and CA$1.0 billion (US$0.7 billion), respectively.

HSBC Announces Approval for Sale of HSBC Canada!

HSBC has affirmed its commitment to considering the payment of a special dividend of $0.21 per share as a priority use of the proceeds from this sale in the first half of 2024. This move aligns with the financial strategy laid out by the bank and demonstrates its dedication to delivering value to its shareholders.

The successful approval from the Canadian Federal Government sets the stage for a strategic reshaping of the banking landscape in Canada, with RBC poised to expand its footprint through this acquisition. Both financial institutions will undoubtedly continue to work closely to ensure a smooth transition and the successful completion of this landmark transaction.

As HSBC remains committed to prioritizing shareholder value through the consideration of a special dividend, the successful execution of this deal stands as a testament to the adaptability and resilience of major players in the global banking industry.

Also, stay updated with the Latest Broker News.