Canada's largest bank will combine its US wealth management unit with City National following the $5 billion cash and stock deal.

Royal Bank of Canada has completed its acquisition of the US private and commercial bank City National Corporation for $5 billion.

Th transaction value will be paid with $2.6 billion in cash and 41.6 million RBC common shares, based on the closing price on the New York Stock Exchange of RBC's common shares of $56.83 on October 30, 2015. RBC will also issue $275 million of RBC first preferred shares in exchange for all outstanding shares of City National preferred stock. 

The acquisition is expected to reduce RBC's Q1/2016 common equity tier one ratio by approximately 70 basis points. The Canadian bank said it continues to forecast a strong capital position going forward.

RBC will combine its US wealth management unit and City National into one line of business as part of the RBC Wealth Management division. City National, which will keep its name, serves high net worth and commercial clients across a number of US metropolitan areas including New York, the San Francisco Bay Area and Orange County. City National chief executive Russell Goldsmith will lead the combined business from Los Angeles, where City National is headquartered.

Together, the two businesses have around 2,100 financial advisors in the US, with combined US-based client assets of $336 billion in wealth and asset management.