Butterfield Bank to acquire CIBC Caribbean in $1.8 billion deal

Butterfield Bank has announced a landmark US$1.8 billion agreement to acquire CIBC Caribbean, significantly expanding its footprint across the region and creating what the institutions describe as the largest independent bank serving island economies.

CIBC Caribbean, headquartered in Barbados and operating in 10 Caribbean countries, is the regional subsidiary of Canadian Imperial Bank of Commerce, commonly known as CIBC.

Under the agreement, Butterfield will pay approximately US$1.09 billion in cash and about US$703 million in Butterfield shares, valuing the transaction at roughly US$1.794 billion, or US$1.14 per CIBC Caribbean share.

The transaction is expected to close in the first half of 2027, subject to regulatory approvals and customary conditions.

Following completion of the deal, CIBC is expected to retain an estimated 22 percent ownership stake in the combined company and will initially have the right to appoint two directors to Butterfield’s board.

In a statement, Butterfield said the merger would create “a leading banking and wealth management platform in international financial centres and attractive Caribbean markets,” with combined assets totaling approximately US$29 billion.

Michael Collins, Butterfield’s chairman and chief executive officer, described the acquisition as a transformative move for both institutions.

“Since Butterfield’s 2016 listing on the NYSE, we have successfully grown and enhanced profitability through bank and trust acquisitions,” Collins said.

“This deal combines two storied and complementary banks, with significant local scale advantages and time-honoured customer relationships in their respective core jurisdictions.”

He added that the transaction would strengthen Butterfield’s position as a leading independent bank and wealth management provider operating across international financial centres and Caribbean markets.

Mark St Hill, chief executive officer of CIBC Caribbean, said the merger aligns two institutions with shared priorities and a common vision for regional banking.

“For our clients, employees and communities, this combination brings together two organisations with shared values and a common focus on relationship banking, innovating and community impact,” St Hill said.

Harry Culham also praised the regional bank’s leadership and said the transaction is expected to create long-term value for stakeholders.

Under the terms of the agreement, unanimously approved by Butterfield’s board of directors, the bank will acquire CIBC Investments (Cayman), the holding company that controls CIBC’s 91.7 percent stake in CIBC Caribbean.

Butterfield will then launch a mandatory takeover bid for the remaining 8.3 percent of shares held by minority shareholders in an effort to secure full ownership of the regional bank.

Minority shareholders will receive equivalent economic terms to those offered to CIBC and may elect to receive up to 100 percent of their consideration in Butterfield shares.

Financial adviser Houlihan Lokey provided an opinion to CIBC Caribbean’s special committee affirming the fairness of the offer from a financial perspective.

To support the acquisition, Butterfield has secured commitments for US$700 million in Tier 2 subordinated debt financing.

The combined institution is expected to maintain capital levels above regulatory requirements, including a projected Common Equity Tier 1 ratio above 12 percent and total capital above 19 percent at closing.

Butterfield’s shares will continue trading on the New York Stock Exchange and the Bermuda Stock Exchange.

The bank also plans to pursue additional listings on the Barbados Stock Exchange, the Bahamas International Securities Exchange and the Trinidad and Tobago Stock Exchange, pending regulatory approval.

The Bermuda Monetary Authority will remain the consolidated regulatory supervisor for Butterfield across all jurisdictions where it operates.

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