Fairstone moves to acquire Laurentian Bank in 1.9 billion dollar deal, National Bank to take over retail clients
Laurentian Bank of Canada, a 175 year old Montreal institution, is set to change hands. Fairstone Bank of Canada has agreed to acquire all outstanding shares of Laurentian in an all cash deal valued at about 1.9 billion dollars, while National Bank will buy Laurentian’s retail and small business operations.
Under the agreement, Fairstone will pay 40.50 dollars per Laurentian share, a premium of roughly 20 percent over the stock’s closing price of 33.76 dollars on 1 December 2025 and about 22 percent over the 20 day volume weighted average price. The transaction gives shareholders immediate liquidity after years of pressure and a strategic review that originally ended in 2023 without a sale.
At the same time, National Bank of Canada will acquire Laurentian’s retail and SME banking portfolios, including approximately 3.3 billion dollars of retail loans and 7.6 billion dollars of deposits, as well as its syndicated loan book. Laurentian will effectively exit traditional retail and small business banking to focus on becoming a specialised commercial lender.
For Quebec and Canadian entrepreneurs, this deal reshapes the landscape of mid tier banking, concentrating retail services further while creating a more focused commercial bank centred in Montreal.
What is actually being sold
The transaction is structured as two linked deals.
First, Fairstone Bank, a Schedule I bank and one of Canada’s largest alternative lenders, will acquire all the issued and outstanding common shares of Laurentian Bank. Fairstone plans to combine its existing commercial lending activities with Laurentian’s specialised commercial portfolio to build a larger national platform in areas such as commercial real estate, equipment financing and capital markets.
Laurentian’s commercial bank will keep its name and brand and remain headquartered in Montreal. As part of the overall package, Fairstone has committed to move its own head office from Toronto to Montreal, a key condition backed publicly by the Caisse de dépôt et placement du Québec, which holds a significant stake in Laurentian and has already signed a voting support agreement.
Second, National Bank will acquire Laurentian’s mass market facing businesses. That includes personal banking clients, small and medium sized business customers and the bank’s syndicated loans portfolio. Those customers will transition to National Bank’s digital platforms, products and broader branch network.
What happens to branches, staff and clients
Laurentian’s physical branch network in Quebec will not survive the transition in its current form. According to details released so far, Laurentian branches will close when the transfer of retail and SME clients to National Bank is completed. Banking operations are expected to continue normally until that cutover date.
National Bank is acquiring customers and portfolios, but not automatically all employees. Staff affected by the shutdown of branches will not be directly transferred, although they will be able to apply for positions at National Bank. For entrepreneurs and households, this means familiar local branches will be replaced by a larger network belonging to a Big Six bank, with the usual mix of more services and less local distinctiveness.
On the client side, the message from Laurentian and National is that customers will gain access to a wider set of retail and business banking solutions, more digital tools and a broader network of advisers. In practical terms, entrepreneurs who currently bank with Laurentian should expect account migrations, new online banking interfaces, updated fee structures and fresh credit underwriting rules once the transfer is complete.
A strategic pivot years in the making
For market watchers, this sale is the conclusion of a long and sometimes difficult process. Laurentian launched a strategic review in 2023 after years of stock underperformance. That review ended without a buyer, and the bank promised to accelerate its own plan and focus on efficiency and simplification.
Since then, Laurentian has dealt with a major IT outage, leadership changes and restructuring measures including job cuts and the closure of its equity research unit. The bank booked significant impairment and restructuring charges in 2024 as it tried to reposition itself, while its share price remained under pressure.
The new deal with Fairstone and National Bank effectively formalises the strategy that management has been signalling. Laurentian exits the crowded, expensive retail market and doubles down on its historical strength in specialised commercial banking, this time under the umbrella of a new owner.
Why this matters for Canadian entrepreneurs
For entrepreneurs and SMB owners, the most direct effect will be on those who currently bank with Laurentian. Retail and small business clients will become National Bank customers, with access to its broader suite of loans, deposits and payments products. National is already a major player in Quebec’s business community, and this acquisition reinforces that position.
That concentration can cut both ways. On one hand, a larger balance sheet and more diversified bank may offer better digital tools, more specialised advisers and potentially more stability through economic cycles. On the other hand, the loss of a smaller regional bank reduces competition in a market where entrepreneurs already feel squeezed by rising borrowing costs and tighter credit conditions.
On the commercial side, Fairstone’s acquisition could create a lender that sits between traditional banks and non bank financiers. As an alternative lender, Fairstone is used to working higher up the risk curve. Combined with Laurentian’s commercial expertise, this could open new channels of financing for certain sectors, particularly asset based lending, inventory financing and specialised real estate.
However, any change of control also brings new credit policies, risk appetites and pricing models. Existing Laurentian commercial clients will want to pay close attention to how Fairstone positions the new combined business, especially around renewal terms, covenants and collateral requirements.
For Quebec’s financial ecosystem, keeping Laurentian’s commercial headquarters, and eventually Fairstone’s head office, in Montreal is a political and economic signal. The Caisse’s support is explicitly tied to those commitments, as well as to keeping Laurentian’s commercial operations rooted in the province.
Approvals, timing and conditions
The acquisition still needs several layers of approval. Laurentian shareholders must endorse the Fairstone deal with a two thirds majority at a special meeting expected in the first quarter of 2026. The transaction is also subject to regulatory approvals, including from the Office of the Superintendent of Financial Institutions and the Competition Bureau.
The agreement includes standard non solicitation clauses, a right for Fairstone to match any superior proposal and a break fee of 40 million dollars payable by Laurentian to Fairstone in certain circumstances, for example if the board supports a higher offer from another buyer.
If all goes as planned, Fairstone will close its acquisition of Laurentian after National Bank completes the transfer of retail and SME assets. The result will be a leaner, specialised commercial bank under the Laurentian name, controlled by Fairstone and anchored in Montreal, while everyday clients migrate into the orbit of one of Canada’s big players.
For Canadian entrepreneurs watching this deal from the outside, the message is clear. Banking relationships and competitive dynamics are shifting again. This is a good moment to review how concentrated your credit exposure is, what options you have among lenders and how much room you want to keep for negotiation as the landscape continues to consolidate.
