City National Agrees To Sell Itself To RBC For $5.4 Billion

City National Corp CYN on Thursday said that it has agreed to sell itself to Royal Bank of Canada RY for $5.4 billion, or $93.80 per share. Shares of City National closed on Wednesday at $74.57 and held a market cap of $4.11 billion.

Shareholders of California-based City National will receive $47.25 in cash and 0.7489 of a share of RBC for each share of City National they own.

RBC plans to combine its U.S. wealth management operation with City National. The bank expects its acquisition to be accretive to its earnings per share in the latter part of year three and accretive to earnings in year two.

RBC's Chief Executive Officer Dave McKay commented that the acquisition is “in line with RBC's strategic goals, we believe this combination creates a powerful expansion platform for focused long-term growth in the country which we view as our second home market.”

Shares of City National recently traded at $90.98 in Thursday's pre-market session, up 22 percent.