U.S. DoJ Requires Divestitures In Keycorp's Acquisition Of First Niagara

(RTTNews) - The U.S. Department of Justice announced that KeyCorp (KEY) and First Niagara Financial Group Inc. have agreed to sell 18 of First Niagara's branches in and around Buffalo, New York, with approximately $1.7 billion in deposits, to resolve antitrust concerns that arose from KeyCorp's planned acquisition of First Niagara.

The department said that the divestitures will ensure that the transaction does not harm competition for retail banking services in the Greater Buffalo area. As a result of the acquisition, KeyCorp will become the 13th largest bank in the nation, with about $135 billion in assets, $99.8 billion in deposits and more than 1000 branches across 15 states.

Under their agreement with the department, the companies have agreed to divest 13 branches in Erie County and 5 branches in Niagara County, New York. The divested assets will include the commercial loans associated with the divested branches.

The companies have also agreed to suspend existing, and not to enter into new, non-compete agreements with their small business and middle market relationship managers and their retail regional and branch managers, in the state of New York, for a period of 180 days following the consummation of their merger.

Further, the companies have agreed to sell or lease branches closed within two years of the consummation of the merger in the state of New York to other depository institutions.