Royal Bank of Canada today announced that it has entered into a definitive agreement to acquire Vancouver-based Phillips, Hager & North Investment Management Ltd. (PH&N).

The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close on or about April 30, 2008.

Under the terms of the agreement, PH&N shareholders will receive 27 million RBC common shares, with a portion deferred until three years after closing. RBC shares closed at $50.39 today on the Toronto Stock Exchange. That makes the deal worth about $1.36 billion.

“We’ve chosen to join forces with RBC because of the many benefits it affords PH&N clients, especially with respect to the kinds of investment opportunities they will need to be successful over the long term,” says John Montalbano, president of PH&N. “RBC has the commitment and resources to leverage our strengths with institutional, private client and mutual fund clients.”

“Together, our vision is to be a clear leader among Canadian-based asset management companies, and to continue to grow our global capabilities in investment management for institutional, retail and high net worth clients,” says George Lewis, group read of RBC Wealth Management and currently CEO of RBC Asset Management.

With combined assets under management in Canada exceeding $160 billion (based on RBC’s and PH&N’s respective year-ends), the two businesses will form one of the largest private sector asset managers in Canada.

RBC notes the transaction will create one of the largest private client investment counselling businesses in Canada with market strengths coast-to-coast, and notably in Western Canada;

It will also make RBC one of the top five managers in the Canadian institutional market for defined benefit and defined contribution pension plans, and will significantly extend RBC’s existing leadership in the Canadian retail mutual fund market.

The transactions expected to be seamless for clients, and create significant benefits in terms of advice, expertise and investment options, RBC says.

Montalbano will become CEO of the combined organization comprising PH&N and RBC’s asset management business.

Upon closing, PH&N will become part of RBC Wealth Management. In the new organization, Brenda Vince, the president of RBC Asset Management, will lead the combined mutual fund and high net worth businesses.

Dan Chornous, currently CIO of RBC Asset Management, will be the CIO of both PH&N and RBC Asset Management.

PH&N’s Hanif Mamdani will be head of alternative investments for both PH&N and RBC Asset Management.

Damon Williams will continue to be head of institutional management at PH&N, which will remain headquartered in Vancouver.

http://www.newswire.ca/en/releases/archive/February2008/21/c4865.html