Fairstone Bank of Canada will acquire Laurentian Bank of Canada for $1.9 billion while National Bank of Canada takes over the retail and small business operations, the companies announced Tuesday, ending the 175-year-old institution’s existence as an independent bank.
Fairstone will pay $40.50 per share in cash for Laurentian’s commercial operations, representing a 20% premium over Monday’s closing price. National Bank will acquire roughly $10.9 billion in retail loans and deposits and $1.4 billion in small and medium enterprise loans and deposits at approximately book value.
The split transaction marks the end of a multiyear search for either a turnaround strategy or a suitable buyer at the Montreal-based lender. The bank faced mounting pressure to achieve the size needed for profitability in Canada’s concentrated banking market. Laurentian launched its first mobile banking app only in 2022, illustrating its technological challenges.
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The Laurentian Bank name will continue under Fairstone’s ownership, with the commercial division maintaining its Montreal headquarters. CEO Éric Provost will remain in his position leading the commercial operations, which include real estate lending, equipment financing, and capital markets activities.
National Bank, Canada’s sixth-largest lender with approximately $594 billion in total assets, will expand its customer base in its home province of Quebec through the acquisition. The bank will gain access to Laurentian’s retail clients while avoiding the legacy issues associated with the branch network.
Laurentian will close its 57 Quebec branches during the transition to National Bank. The bank’s roughly 2,715 employees will not automatically transfer to the acquiring institutions but may apply for available positions.
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Jefferies analyst John Aiken called the deal “an exit that benefits current shareholders with an exit that we did not view as likely.”
The transaction requires approval from two-thirds of Laurentian shareholders at a special meeting expected in early 2026. The Caisse de dépôt et placement du Québec, which owns approximately 8% of Laurentian shares, has voiced support for the deal.
Customers should watch for email or mail notifications about account transitions, according to Natasha Macmillan, everyday banking expert at Ratehub.ca. She said acquiring banks generally work to ensure smooth transitions as they seek to retain the new client base.
The sale adds to a wave of consolidation in Canadian banking. Recent major transactions include RBC‘s acquisition of HSBC Canada two years ago.
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