TORONTO — The Bank of Montreal is buying a Milwaukee-based bank, the latest example of Canadian banks using their muscle to snap up US financial institutions battered by the financial crisis.
Canada's fourth largest bank announced Friday that it was acquiring Marshall & Ilsley Corp. for $4.1 billion in stock, doubling its presence in the US from 321 branches to 695.
The news sent shares of M&I surging 18 percent, up $1.05, to $6.84 in afternoon trading, while US-traded shares of the Bank of Montreal fell $4.16, or 6.7 percent, to $57.50.
Canadian banks, ranked the soundest in the world by the World Economic Forum, weathered the economic crisis far better than their counterparts in other countries. In a concentrated banking system dominated by five major players, Canadian banks have been looking across the border to find growth opportunities, casting an eye toward distressed US banks.
The Toronto-based bank signed a definitive agreement with M&I to exchange 0.1257 Bank of Montreal shares for each share of M&I, which it values at $7.75 apiece.
"The timing is very good," Bank of Montreal President and CEO Bill Downe said in an interview with The Associated Press. "It certainly represents a very good value."