The deal, which is expected to be closed by the end of 2006, will see CIBC pay US$1.62 for each FirstCaribbean share for a total price of approximately US$1.08 billion. Once it is completed, CIBC will own 87.4% of FirstCaribbean, with the remaining shares held by regional investors.

Under the definitive agreement, CIBC has the option of paying for the transaction in cash, CIBC common shares, or a combination of cash and shares, the relative proportions of which CIBC will determine before completion.

Promptly after the close of the transaction, CIBC will be required to make a mandatory offer to all shareholders in FirstCaribbean. The mandatory offer will also be at a price of $1.62 per share.

The parties have agreed to structure the transaction in two stages, with Barclays selling 90% of its holding initially and CIBC potentially acquiring, at Barclays' option, the balance in its subsequent mandatory tender offer.

CIBC will also pay an additional sum to Barclays, as well as the other shareholders who tender their shares to this offer, to reflect dividends in respect of their period of ownership prior to closing.

FirstCaribbean’s CEO, Charles Pink, commented: "FirstCaribbean continues to believe that having a major global bank like CIBC as controlling shareholder will be a very positive step for our company."

CIBC acquired its current ownership stake in FirstCaribbean in 2002, when its Caribbean operations were merged with those of Barclays to form FirstCaribbean. The bank created offers corporate, retail, international wealth management and capital markets banking, and it is the largest, regionally-listed bank in the English-speaking Caribbean, with assets of over US$9.5 billion and market capitalization of US$3.3 billion. The bank was named “Best Emerging Market Bank” by Global Finance magazine of New York in 2004 and 2005.

Naguib Kheraj, Group Finance Director of Barclays PLC, added that the transaction leaves FirstCaribbean "well positioned" for its future development.

“While the combination of Barclays and CIBC’s Caribbean retail banking assets created value for all stakeholders, the future strategy of FirstCaribbean is now best pursued with one controlling shareholder," he explained.