The Daily Chase: BMO doing largest takeover in its history; Omicron weighs on markets
BNN Bloomberg
Bank of Montreal announced the largest takeover in its history overnight. The lender is buying BNP Paribas’ U.S. unit for US$16.3 billion, giving it a new base to build off of in California.
Bank of Montreal announced the largest takeover in its history overnight. The lender is buying BNP Paribas’ U.S. unit for US$16.3 billion, giving it a new base to build off of in California (where the business has 70 per cent of its US$89 billion in deposits). It’s an all-cash deal and BMO said it’ll help cover the cost by raising $2.7 billion in a share sale and by holding off on a buyback program. We’ll gather reaction and insight on the opportunities and challenges ahead for BMO as it establishes a new springboard for growth.
MARKETS UNDER PRESSURE
The rapidly spreading Omicron variant of COVID-19 and a major legislative setback in the U.S. are weighing on equities and oil prices this morning. On the pandemic: the Netherlands went into lockdown yesterday; while closer to home, another wave of restrictions came into effect in Ontario. One bit of encouraging news that helped lift U.S. futures off their low: Moderna released preliminary data showing its booster candidate delivered a 37-fold increase in antibody levels against Omicron. Plenty of questions to be asked about how quickly third doses can be rolled out; we’ll address that issue with the president of Moderna’s Canadian unit at 1 p.m.
BIDEN BILL SUFFERS MAJOR SETBACK
It could be back to the drawing board for U.S. President Joe Biden’s nearly US$2-trillion spending and tax-cut package after a key Democrat – Senator Joe Manchin – told Fox News yesterday he can’t support the legislation. White House Press Secretary Jen Psaki said the Biden administration “will find a way to move forward next year.” For now though, the stakes are clear as Goldman Sachs slashed its U.S. growth estimates as a result, including a full percentage point reduction for the first quarter (to two per cent).
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