Reprinted with permission from the Times Union
ALBANY–KeyCorp’s announcement it will buy Buffalo-based First Niagara Financial Group for $4.1 billion in stock and cash could face opposition from the state’s senior senator.
Senator Chuck Schumer said Friday, October 30, that he is concerned by the impact on jobs and competition the acquisition would have in upstate New York. The proposed acquisition of First Niagara by Key Bank, on initial examination, seems extremely troubling because the banks overlap so much and merging may entail significant job losses and reduce competition across Upstate New York, Senator Schumer said.
“I am seriously considering opposing this merger, but will await getting some details from the CEO of Key Bank, as to the specifics of their plan and how it would affect jobs in Western New York.”
The deal would create the country’s 13th largest commercial banking operation with $135 billion in assets.
Under the terms of the deal, First Niagara shareholders would receive 0.68 Key shares and $2.30 in cash for each of their shares.
KeyCorp is the parent company of KeyBank, which is the largest bank in the Capital Region with $5.3
billion in assets and 39 branches. First Niagara is the fourth largest bank in the Capital Region with 31 branches, a situation that will likely lead to local branch consolidations. There are at least five Frist Niagara branches in the county and KeyBank has three.
In documents the bank filed with the U.S. Securities and Exchange Commission about the merger,
KeyBank noted that it looked at instances where branches were within 2 miles of one another, which
would increase the overlap to about 16 First Niagara branches, about 41 percent of KeyBank’s branch
network. However, KeyBank spokeswoman Therese Myers said Friday that nothing has been decided yet in terms of the future of the two banks branch networks.
“It is way too early in the process to talk about specific numbers or locations. Speculating on numbers
now would not be fair to our clients, communities or employees,” Ms. Myers said.
“Our leadership is committed to telling employees what they know when they know it.”
The acquisition requires regulatory approvals and the approvals of both institutions’ shareholders. The
deal is expected to close in the third quarter of 2016.
