The member-owners of Edmonton-based Servus Credit Union, Community Savings of Red Deer, Alta., and Common Wealth Credit Union of Lloydminster, Alta., have voted overwhelmingly in favour of merging the three financial co-operatives.

The new entity is set to begin operations on Nov. 1 and will create, by far, the largest credit union in Alberta and the third-largest in the country outside of Quebec.

“We’re going to be able to serve the whole province, from Fort McMurray in the north right down to Lethbridge and Crowsnest Pass in the south,” says Murray Haubrich, president and CEO of Community Savings, the second-largest of the three credit unions to be merged.

The new combined credit union boasts $8.6 billion in assets as of Oct. 31, 2007. By contrast, the next-largest credit union in Alberta, First Calgary Savings, had $1.9 billion in assets at the end of fiscal 2007.

The names of the 12 board members of the merged credit union have been announced, with four being taken from each of the existing boards of the three credit unions. The board members of the new credit union have been given the task of selecting a chairman as well as a president and CEO by May. The board will also work on building a strategic plan, establishing a head office and determining a name for the new entity.

The merged credit union will have a total of 400,000 members in 92 branches in 63 Alberta communities, as well as 1,925 employees. No layoffs or job cuts are planned.

“We’ve guaranteed a job for everybody but two CEOs,” says Haubrich, who acknowledges that he is in the running for the top job.

The three credit unions are merging for a variety of reasons, chief among them the ability to create a financial co-operative giant in Alberta that can compete against myriad financial services competitors in the booming province, according to the leadership of the three credit unions. Among these competitors are expected to be the large British Columbia-based credit unions, which are likely to expand into Alberta next year when the new trade, investment and labour mobility agreement between the two provinces allows them to do so.

In between the time of the announcement of the intention to merge in February and the general meetings for each of the three credit unions in March to approve the merger, one of the credit unions received an unexpected takeover offer. Twelve days before Community Savings’ Mar. 18 special general meeting, the credit union learned that it would be the target of a hostile takeover proposal from Western Financial Group of High River, Alta. The company said it would offer Community Savings members $345 million in cash, shares and payments in its proposed deal, to be implemented through Western Financial’s Bank West subsidiary.

The aboard of Community Savings declined to put the bid on the agenda of its shareholder meeting; on Mar. 10, Western Financial announced it would not proceed with its proposed takeover.

Community Savings’ membership voted 99% in favour of the proposed merger with Servus and Common Wealth at the special general meeting. Meanwhile, Servus members voted 92% in favour of the merger and Common Wealth members voted 99% in favour of the merger at their respective annual general meetings. IE