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News Releases


Phillips, Hager & North Investment Management joins forces with RBC

Clients to benefit from combination of two asset management leaders

TORONTO and VANCOUVER, February 21, 2008 — Royal Bank of Canada (RY on TSX and NYSE) today announced that it has entered into a definitive agreement to acquire 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. The transaction is not expected to have a material impact on earnings per share in the near term.

"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," said John Montalbano, President of PH&N. "RBC has the commitment and resources to leverage our strengths with institutional, private client and mutual fund clients. In all, it's a great result for our clients, for the two companies, and for our people who have made PH&N the success it is today."

"Success in our business is always driven by the quality of our people. We are thrilled that such a talented and committed team is joining us at RBC," said Gord Nixon, CEO of RBC.

"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," said George Lewis, Group Head of RBC Wealth Management and currently CEO of RBC Asset Management.

Third party rankings and surveys position PH&N highly for both performance and client service - two competitive strengths shared by RBC. "This transaction leverages the respective strengths and growth opportunities of two leading asset management companies," said Mr. Lewis. "We are extremely proud of the success of RBC's industry leading investment performance, most recently reflected in our receipt of the 2007 "Best Overall Fund Group" award in Canada from Lipper Inc., for delivering consistently strong risk-adjusted performance relative to peers."

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. Specifically, 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;

  • Will make RBC one of the top five managers in the Canadian institutional market for defined benefit and defined contribution pension plans;

  • Will significantly extend RBC's existing leadership in the Canadian retail mutual fund market; and

  • Is expected to be seamless for clients, and create significant benefits in terms of advice, expertise and investment options.

Said Mr. Lewis, "We want to be the first choice for every client in Canada with asset management needs. With this announcement, we have an even stronger team, a larger playing field, and a well diversified, stable business mix, with strengths and talent across all asset classes, client segments and distribution channels of asset management."

Mr. 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.

About PH&N
Founded in Vancouver in 1964 and headquartered there, Phillips, Hager & North Investment Management Ltd. is one of Canada's oldest and largest independent investment management firms. It employs 300 staff and has approximately $69 billion of assets under management. Offices are located in Vancouver, Victoria, Calgary, Toronto and Montreal.

About RBC Wealth Management
RBC Wealth Management directly serves affluent and high net worth clients in Canada, the United States, Latin America, Europe and Asia, and provides asset management and trust products and services directly and through RBC partners and third-party distributors. RBC Wealth Management has nearly $500 billion of assets under administration, more than $160 billion of assets under management, and more than 3,600 financial consultants, advisors, private bankers and trust officers.

A conference call is scheduled to take place on February 21, from 5:00 p.m. to 5:30 p.m. (EST) [2:00 p.m. to 2:30 p.m. (PST.)] and will feature a presentation followed by a brief question and answer period with analysts. Interested parties can access this call live on a listen-only basis via telephone at: 416 695-7806 or 1-888-789-9572, passcode 3253288#. Please call between 4:50 p.m. and 4:55 p.m. (EST).
A recording of the conference call will be available after 8:00 p.m. (EST) on February 21 until May 21 via telephone at: 416-695-5800 or 1-800-408-3053, passcode 3253288#.

Information related to this announcement will be available at: www.rbc.com/investorrelations.

- 30 -

Media Inquiries should be directed to:

Chris Dotson, Vice President, Phillips, Hager & North Investment Management Ltd.

Beja Rodeck, Director, Media & Public Relations, RBC

Rina Cortese, Head, Communications, RBC Wealth Management, Canada

Investor Relations Inquiries should be directed to:
Amy Cairncross, RBC

William Anderson, RBC

The RBC common shares to be issued to securityholders of PH&N in connection with the transaction described above will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from such Act's registration requirements.

Caution Regarding Forward-Looking Statements

Certain statements contained in this press release may be deemed to be forward-looking statements under certain securities laws, including the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities legislation. These forward-looking statements include, but are not limited to statements with respect to the acquisition of PH&N by RBC. Forward-looking statements are typically identified by words such as "believe", "expect", "forecast", "anticipate", "intend", "estimate", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "should", "could", or "would".

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations and other forward-looking information, including statements about the acquisition of PH&N by RBC will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors include, but are not limited to the possibility that the proposed acquisition does not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, that RBC and PH&N may be required to modify the terms and conditions of the proposed transaction to achieve regulatory approval, or that the anticipated benefits of the transaction are not realized as a result of such things as the strength of the economy and competitive factors in the areas where PH&N does business; the impact of changes in the laws and regulations regulating financial services and enforcement thereof (including banking, insurance and securities); judicial judgments and legal proceedings; RBC's ability to complete the acquisition of PH&N and to integrate it with RBC successfully; reputational risks, and other factors that may affect future results of RBC and PH&N, including timely development and introduction of new products and services, changes in tax laws, and technological and regulatory changes. We caution that the foregoing list of important factors is not exhaustive. Additional information about these and other factors can be found in RBC's 2007 Annual Report.

Except as required by law, Royal Bank of Canada and PH&N assume no obligation to update the forward-looking statements contained in this press release.


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02/22/2008 09:12:35