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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.
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Media Inquiries should be directed to:
Chris Dotson, Vice President, Phillips, Hager &
North Investment Management Ltd.
604-408-6009
Beja Rodeck, Director, Media & Public Relations,
RBC
416-974-5506
Rina Cortese, Head, Communications, RBC Wealth Management,
Canada
416-974-6970
Investor Relations Inquiries should be directed to:
Amy Cairncross, RBC
416-955-7809
William Anderson, RBC
416-955-7804
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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