French bank BNP Paribas has reached an agreement with Canada’s Bank of Montreal (BMO) to sell its U.S. unit Bank of the West for $16.3 billion, BNP Paribas said in a statement. The deal is expected to be finalized during 2022, with the banks needing regulatory approval. The agreement will provide a one-time capital increase of about 2.9 billion euros, BNP Paribas said. After completion of the deal BNP Paribas plans a series of share buybacks. The deal may become one of the largest in the banking industry in recent times, writes The Wall Street Journal.

The agreement will facilitate the expansion of Bank of Montreal in the U.S., where the bank has been developing a presence over the past few years. The total assets of the banks as a result of the deal could reach about $870 billion.Bank of the West operates in the commercial segment and consumer banking, as well as carries out specialized financial and other operations. The bank has total deposits of about $89 billion and assets of about $105 billion.It has been owned by BNP Paribas since 1979. Bank of Montreal is the fourth largest bank in Canada.

The bank’s U.S. unit accounts for about 38% of its revenue, the WSJ writes. In the U.S., BMO operates in the commercial and retail segments, as well as wealth management and capital markets. Large Canadian banks have limited ability to expand within the country, and are therefore looking for options in the States.

For example, Royal Bank of Canada, the country’s second largest bank, acquired U.S.-based City National Corp. in 2015 for $5.4 billion. In turn, Toronto-Dominion, Canada’s largest bank, has more units in the U.S. than it does in Canada. BNP Paribas shares are getting cheaper during trading in Paris on Monday.