As part of the deal, which is placed before regulators for their approval, the bank has proclaimed a public offering of 29 million common shares at $52 on a bought deal basis for gross proceeds of $1.5bn to fund the acquisition, the Canadian lender said.
Scotiabank president and CEO Rick Waugh said ING DIRECT has had proven success in meeting the needs of those Canadians who are not looking for the added services, advices and relationships provided by traditional banking channels.
"ING DIRECT will benefit from the backing of a strong, stable Canadian shareholder with the additional resources to enable it to expand and grow. This in turn will provide our shareholders with a new source of incremental earnings beginning in year one, and a new deposit base to further diversify our funding," Waugh added.
ING DIRECT is the 8th largest bank in Canada, which owns nearly $40bn in assets, $30bn in deposits, 1.8 million customers, and over 1,100 employees.
Scotiabank Canadian banking group head Anatol von Hahn commented, "ING DIRECT will continue to operate separately and customers will be able to interact the way they do now using their existing account numbers and passwords, served by the same familiar team."
The deal is expected to close by the end of 2012, and in accordance with the terms of acquisition, Scotiabank will also fund the redemption of $320.5m of subordinated debt issued by ING DIRECT, the acquirer said.
