-
KeyCorp will sell 18 branches as part of an agreement with the Justice Department and the Federal Reserve Board to complete its purchase of First Niagara Financial Group.
April 28 - New York
The New York company took investors on a roller coaster ride over a dozen years, with issues that included a CEO's death, another leader's ambitious M&A strategy, and an ill-timed effort to upgrade outdated technology.
October 30 -
KeyCorp's deal to buy First Niagara is a return to significant M&A for a company that has long been content to stay on the sidelines. But getting such a deal approved is tougher than ever, and will test Beth Mooneys regulatory juice.
October 29 -
First Niagara Financial Group in Buffalo, N.Y., considered offers from four potential acquirers before deciding in late October to sell itself to KeyCorp.
December 1
KeyCorp has received the Federal Reserve Board's approval to buy First Niagara Financial Group.
The $4.1 billion deal is expected to be completed on or about Aug. 1, and the conversion of First Niagara's technological systems and client relationships should occur in the fourth quarter, the $98 billion-asset KeyCorp said in a press release Tuesday. The Office of the Comptroller of the Currency, which regulates First Niagara's bank, has yet to sign off on the acquisition.
First Niagara, based in Buffalo, N.Y., had $40 billion of assets and $30 billion of deposits as of March 31; it has about 390 branches in New York, Pennsylvania, Connecticut and Massachusetts.
Cleveland-based KeyCorp faced a number of skeptical questions and other hurdles after the merger agreement was announced on Oct. 30.
Almost immediately, KeyCorp shareholders raised concerns that the offer was too generous and the resulting
Questions were also raised about how big an appetite regulators would have for additional large deals considering that other M&A agreements were in the works last fall, too, including deals announced by BB&T and New York Community Bancorp.
In March, KeyCorp said it would direct
KeyCorp said in April that it had agreed to sell 18 branches in the Buffalo market, along with $1.7 billion of deposits and $500 million of loans, to Northwest Bancshares in Warren, Pa., to secure Justice Department and Fed approvals.
In the end, the Fed said that 388 of the 439 public comments it received were positive, with support coming from charitable and community organizations. The 51 opponents expressed concern about the potential loss of competition, jobs and community investment in the upstate New York markets, including Buffalo, and complained about the quality of Key's products, its fair-lending record and payments to certain First Niagara executives.
But the Fed approval pointed out that 35% of KeyCorp's $16.5 billion commitment would be targeted for the areas where it and First Niagara overlap in New York, while also noting that KeyCorp had offered a detailed reinvestment plan.
"KeyCorp contends that it has taken substantial steps to ensure that consummation of the proposal would not result in any disruption of banking services, including the closing of accounts, for customers of First Niagara," the
Paul Davis contributed to this article.
