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Scotiabank to Acquire 14.9% Stake in KeyCorp for $2.8 Billion

Aug 12, 2024 1 min read

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The Bank of Nova Scotia (Scotiabank) has announced an agreement to acquire a 14.9% stake in U.S. regional bank KeyCorp for approximately US$2.8 billion. This investment will be made through the purchase of 163 million KeyCorp common shares at a price of $17.17 per share, which represents an 11% premium over the volume-weighted average price for the past 20 trading days. The acquisition will be executed in two stages: an initial investment of US$800 million for a 4.9% stake, followed by a subsequent US$2 billion investment to reach the full 14.9% stake, expected to close in fiscal 2025.

KeyCorp, which operates in 15 states with about 1,000 branches, aims to use the capital to restructure its balance sheet and enhance its financial stability. The transaction, which requires approval from the Federal Reserve, is anticipated to be accretive to Scotiabank's earnings per share in the first full year following the completion of the additional investment. The deal also includes provisions for Scotiabank to potentially designate two individuals to KeyCorp's Board of Directors.

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