Royal Bank of Canada (TSX:RY) (RBC) said it is to buy Brewin Dolphin Holdings Plc (LSE:BRW) for £1.6bln in cash to bolster its wealth management operations in the UK and Ireland.
Brewin Dolphin shareholders will be offered 515p per share, a 62% premium to the closing price on Wednesday, Canada's largest lender said in a statement.
The deal values the UK wealth manager at 2.8% of its £55bln in assets under management as of 28 February.
"The UK is a key growth market for RBC," said Doug Guzman, group head, RBC Wealth Management, RBC Insurance and RBC Investor & Treasury Services.
"Brewin Dolphin provides us with an exceptional platform to significantly transform our wealth management business in the region, giving RBC Wealth Management a #3 market position in the UK and Ireland, in addition to being a market leader in Canada, with a growing position in the United States,”
Brewin Dolphin is one of the UK's leading independent providers of discretionary wealth management in the UK and Ireland, with a network of more than 30 offices and assets under management of £59bln as of 31 December, 2021.
Robin Beer, Brewin Dolphin's Chief Executive Officer, said the board was pleased to recommend the offer in the interests of shareholders, clients, staff and business partners and will focus on maintaining continuity, “so that we build on what we have already achieved”.
Pending regulatory and shareholder approvals, the deal is expected to complete at the end of the third quarter, RBC said.
Brewin Dolphin shares surged 60% at 510.4p in early trade.