KEYCORP /NEW/ acquires First Niagara Financial Group, Inc.

KEYCORP /NEW/ acquired First Niagara Financial Group, Inc. for approximately $4.1 billion, a transaction completed in July 2016, structured as cash and stock.

First Niagara Financial Group, Inc. operates in Regional banking (Consumer Bank / Commercial Bank), is based in Buffalo, New York (branches across New York, Pennsylvania, Connecticut and Massachusetts). First Niagara, headquartered in Buffalo, N.Y., was a regional bank with approximately $39 billion in assets, $29 billion in deposits and 394 banking offices across New York, Pennsylvania, Connecticut and Massachusetts. KeyCorp acquired it in a cash-and-stock transaction valued at approximately $4.1 billion, creating what was then the 13th largest U.S.-headquartered commercial bank with roughly $135 billion in pro forma assets and around three million clients.

The acquisition diversifies KeyCorp's loan portfolio, strengthens its core retail deposit franchise and provides expanded scale. Shareholders of both companies were expected to benefit from annual cost savings in excess of $400 million from maximizing efficiencies of technology infrastructure, procurement savings across the combined organization, and optimizing overlapping branches.

Strong deposit franchise and branch presence in Upstate New York (Buffalo, Albany, Syracuse, Rochester) plus attractive markets in Pennsylvania, Massachusetts and Connecticut; added scale to drive operating leverage. Annual cost savings in excess of $400 million from technology-infrastructure efficiencies, procurement savings and optimization of overlapping branches; acquisition expected to be accretive to EPS in 2017. Integrated into KeyBank; three First Niagara directors expected to join the KeyCorp Board at closing.

Advisory firms were not disclosed for this transaction.