First Niagara Financial Group, which acquired New Haven’s NewAlliance Bank in 2011, said Friday it has agreed to be purchased by an Ohio bank for $4.1 billion.
KeyCorp, with $96 billion in assets will absorb First Niagara’s $39 billion in assets and 394 banking offices in Connecticut, New York, Pennsylvania and Massachusetts, as part of the deal.
With approximately $135 billion of assets, the combined bank will be the 13th largest commercial bank headquartered in the U.S. The two sides said the transaction gives them enhanced scale to serve 3 million clients across diverse markets in the Northeast, Mid-Atlantic, Midwest and Pacific Northwest. KeyCorp said it plans to expand its operations to what it terms “attractive markets” throughout Connecticut, Pennsylvania, and Massachusetts.
First Niagara shareholders will receive 0.68 KeyCorp shares and $2.30 in cash for each First Niagara common share. The per share consideration is valued at $11.40 per share based on the closing price of KeyCorp common stock on Oct.29.
Gary M. Crosby, president and CEO of First Niagara, said, “Combining our strengths with those of Key will enable us to even better serve customers with a broader set of product features and functionality, while providing our team members with expanded opportunities as part of a larger, more-diversified organization.”
Upon completion of the transaction, the combined company will have approximately $99.8 billion in deposits, $83.6 billion in loans and 1,366 branches across 15 states. The combined company will have approximately $135 billion of pro forma assets providing increased operating leverage to deliver improved financial performance.
The acquisition is subject to customary closing conditions, including regulatory approvals and approval by KeyCorp and First Niagara shareholders. The transaction is expected to close in the third quarter of 2016.
