Canadian Imperial Bank of Commerce said it would buy Chicago-based PrivateBancorp Inc. in a cash-and-stock deal valued at about $3.8 billion to offer its Canadian clients access to U.S. banking services.
PrivateBancorp's shares rose about 25 percent to $45 in early trading on Wednesday, below the offer price of $47 per share.
CIBC, Canada's fifth-largest lender, said the deal would help it significantly expand its reach in North America.
The lender, like rivals Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal, has been facing investor concerns that it is too exposed to the Canadian market, which has been hit badly by the prolonged slump in oil prices.
CIBC also said the acquisition would help it provide commercial and private banking services to the clients of Atlantic Trust, a wealth management firm it acquired in 2014.
PrivateBancorp, a middle market-focused commercial lender with $17.7 billion in assets, will remain headquartered in Chicago and retain its Illinois state banking charter.
The bank has about 1,200 employees and presence in 11 U.S. markets in addition to Chicago.
The deal, expected to close in the first quarter of 2017, comes six months after CIBC sold its 41 percent stake in Kansas City, Missouri-based money manager American Century Investments to Japan's Nomura Holdings Inc.
At the time, CIBC Chief Executive Victor Dodig said the bank had decided to monetize the investment as a "path to control was not going to be available over time."
J.P. Morgan Securities LLC and CIBC World Markets Inc. are CIBC's financial advisers for the transaction and Mayer Brown LLP, Sidley Austin LLP and Torys LLP are its legal advisers.
Goldman Sachs & Co. is PrivateBancorp's financial adviser and Wachtell, Lipton, Rosen & Katz and Vedder Price its legal counsel.