Connecticut Attorney General Richard Blumenthal asked for justification of First Niagara Financial Group Inc.’s planned acquisition of his state’s NewAlliance Bancshares Inc., Bloomberg News reports.
The plan raises significant issues, including the effect on the Connecticut economy, Blumenthal said today in a letter to the banks’ presidents. He asked for information on matters including jobs that might be lost and branches that might close.
The state Banking Department may legally approve only mergers that benefit the Connecticut economy and the public, Blumenthal said in a statement.
First Niagara, based in Buffalo, New York, agreed to acquire NewAlliance, based in New Haven, Connecticut, for about $1.5 billion in cash and stock, the companies said in a statement Aug. 19. First Niagara said it will have $29 billion in assets, ranking it among the 25 biggest U.S. lenders.
“My focus is particularly on jobs and small businesses — whether people will lose jobs or businesses sources of lending — and the economy in general,” Blumenthal said in the statement.
The deal would be the largest takeover of an operating U.S. commercial bank since PNC Financial Services Group Inc. agreed to buy Cleveland-based National City Corp. in October 2008, according to data compiled by Bloomberg.
First Niagara, founded in 1870, is pushing into New England after completing at least nine acquisitions of banks or branches in the past decade.
In a written statement First Niagara said “we will of course respond to Mr. Blumenthal’s requests and know that once he has the chance to familiarize himself with the range of benefits that this proposed transaction holds for consumers, businesses and communities, and once he understands First Niagara’s record of performance, he’ll clearly see the value of the proposed merger for the State and communities that he serves.”
