BMO to sell transportation, vendor finance businesses to Stonepeak

BMO Financial Group says it has signed a definitive agreement to sell its transportation finance and vendor finance businesses in Canada and the United States to Stonepeak.

The deal includes related loan and lease portfolios valued at about $14.5 billion as of March 31, 2026.

BMO said the transaction is part of its strategy to improve capital efficiency and focus on core markets where it sees stronger long-term growth opportunities.

“This transaction is consistent with BMO’s focus on delivering sustained profitable growth, and enables us to invest in areas that deliver the full power of BMO to our clients,” said Aron Levine, president of BMO U.S.

BMO’s transportation finance business provides financing for trucks and trailers through dealer-managed relationships, while its vendor finance division offers equipment financing through manufacturers and dealer networks.

Under the agreement, New York-based Stonepeak will acquire the businesses for cash consideration and an earnout tied to future performance targets. BMO will also retain an approximate 19.9 per cent equity interest in the new entity.

For accounting purposes, BMO said it expects to record a net after-tax charge of about $900 million in the third quarter of 2026, primarily related to goodwill.

The bank said the transaction is expected to improve its common equity Tier 1 ratio by about 28 basis points and increase return on equity.

The deal is expected to close in the fourth quarter of fiscal 2026, subject to regulatory approvals and customary closing conditions.