Bank of Montreal (TSE:BMO), Canada’s fourth-largest lender, agreed to buy GE (NYSE:GE) Capital’s transportation-finance business in the U.S. and Canada.
The purchase price wasn’t disclosed.
The companies said in a statement late on Thursday that the business being acquired had net earning assets of about C$11.5bn at June 30 and that the final price would be based on the value of those assets at closing, plus an unspecified premium.
The Toronto, Ontario-based lender said it would use its balance sheet to fund the acquisition, adding that it wouldn’t issue any common shares in the deal.
The bank said the deal is expected to add about 3% to adjusted net income.
Canada’s big banks have been looking abroad for expansion to help overpower slowing growth in their key domestic banking markets.
GE has announced a stream of divestitures since April, including its U.S. buyout-lending unit to Canada’s largest pension-fund manager.
The GE business BMO is acquiring is based in Irving, Texas, and is the largest North American financier to the commercial truck and trailer segment. The business operates out of 11 locations in the U.S. and four in Canada and employs about 600 people.
The deal is expected to close in BMO’s fiscal first quarter, which will end January 31, 2016.
Shares of BMO fell 0.7% to C$68.90 at 11:33 p.m. in Toronto, erasing an earlier gain.