BNS drops on Keycorp news Bank of Nova Scotia has agreed to invest $2.8 billion in KeyCorp, positioning itself for new commercial opportunities and strengthening its foothold in the U.S. market.
The move by the Canadian financial institution targets one of its key markets, with the investment in KeyCorp significantly boosting its capital deployment in the U.S.
“This transaction provides attractive near-term returns to our shareholders and creates future optionality for Scotiabank in the North American corridor,” Scotiabank Chief Executive Scott Thomson said Monday.
KeyCorp, which is based out of Cleveland, Ohio, operates about 1,000 branches across 15 states and has $187 billion in assets. The company offers commercial and retail banking, as well as investment advice and services.
While Scotiabank doesn’t have a retail presence in the U.S., it does operate in the country through its financial services arms, Global Banking and Markets, Global Business Payments and Wealth Management.
Through the acquisition, the two companies also plan to explore commercial opportunities to partner together in the future to serve their respective client bases.
Scotiabank will pay $17.17 a share to acquire the ownership stake in the KeyCorp in two stages, starting with an initial 4.9% stake at the end of August. The second part of the investment is expected to complete after receiving approval by the Federal Reserve and satisfying other closing conditions in the first quarter of 2025.