National Bank has agreed to buy Canadian Western Bank for about $5 billion in an all-stock deal.

The deal has widespread commercial real estate implications in terms of National Bank expanding its geographical footprint and investors gaining greater access to capital, among other factors.

“This combination will provide customers with access to a broader range of services, expertise and products, along with the benefits of supporting technological investment and innovation,” said Laurent Ferreira in a news release. “When we combine these strengths with our commercial and retail banking offering, leading wealth management and capital markets franchises, we will be able to do more for clients, both existing and new, and unlock significant value creation opportunities.”

National Bank will maintain Edmonton-based CWB’s office and add two members from the target bank to its board. The proposed deal only requires two-thirds of CWB shareholders to approve it.

National will expand its board by adding two representatives from CWB.

In conjunction with the acquisition, National Bank announced that it plans to complete a $1-billion equity financing, which may increase due to an over-allotment, that was slated to close Wednesday.

And, the Caisse de dépôt et placement du Québec (CDPQ) announced that it has agreed to invest $500 million in National Bank. If all goes according to plan, CDPQ will become National Bank’s second-largest shareholder.

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