After years of trying to restructure and find a suitable buyer, Laurentian Bank is finally being sold in two separate transactions. Under the deal, the bank’s commercial operations will be sold to Fairstone Bank of Canada for $1.9 billion, while the retail and small business banking division will be acquired by National Bank at close to book value.

However, Laurentian Bank’s street-level branches will not continue. The bank’s 57 branches and employees will not be transferred to National Bank, and employees will only be able to apply for vacant positions. The decision will affect a significant portion of Laurentian’s 2,715 employees, and it is not yet clear how many will remain in the new Fairstone structure.

According to CEO Eric Provost, the deal is an important step in Laurentian’s greater focus on commercial services such as real estate lending, equipment financing and capital markets activities. He said joining Fairstone would strengthen these areas and preserve the Laurentian brand.

Laurentian’s retail customers, on the other hand, would gain access to broader services and more up-to-date technology by moving to National Bank, an area that has been a major challenge for Laurentian in recent years.

Under the agreement, Fairstone would pay $40.50 in cash for each Laurentian share, with National’s payment based on the balances of the accounts at the time of closing. The deal must be approved by two-thirds of Laurentian shareholders. The Cité de Dépôt et Placement du Québec, which owns about 8 percent of the bank, has expressed its support for the deal.

Experts, including Jefferies analyst John Aiken, have called the deal the best possible outcome for Laurentian shareholders, and believe National Bank will also benefit from the increased scale of its operations in Quebec, without facing the historical problems of Laurentian's branch network.

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