ALBANY, N.Y. — Gov. Andrew Cuomo said today that he believes KeyBank’s proposed acquisition of First Niagara Bank would have a “devastating impact” on consumers and businesses in upstate New York.
So he is urging the federal government to “reject the application,” according to a statement his office released Wednesday afternoon.
KeyCorp (NYSE: KEY), holding company for KeyBank, on Oct. 30 agreed to acquire First Niagara Financial Group Inc. (NASDAQ: FNFG), parent of First Niagara Bank, in a cash and stock transaction valued at about $4.1 billion. The two banks currently rank third and fifth, respectively, in deposit market share in the Syracuse metro area, according to the latest FDIC statistics.
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Cuomo contends that the proposed acquisition would reduce retail-banking competition, limit consumer access and convenience, and “ultimately eliminate jobs” throughout the region.
“Blocking this deal is the right thing to do — plain and simple — and my administration will not hesitate to stand up for New Yorkers by opposing this acquisition,” Cuomo said in his statement.
Cuomo is the latest public official to oppose or publicly question the banking merger. U.S. Senator Charles Schumer said early on that he had concerns about the proposal. Erie County Executive Mark Poloncarz and U.S. Representative Brian Higgins (D–Buffalo) spoke out against the acquisition last Friday, according to an article on the website of the The Buffalo News.
Cuomo formally requested that federal officials block the proposed merger in a letter his office released Wednesday.
The governor addressed his letter to Scott Alvarez, general counsel for the board of governors of the Federal Reserve System; Amy Friend, senior deputy comptroller and chief counsel for the Office of the Comptroller of the Currency; and Jeffrey Martino, chief of the New York office the antitrust division of the U.S. Department of Justice.
In the letter, Cuomo writes that Key’s proposed acquisition of First Niagara raises “significant” anti-trust concerns. The acquisition, “if allowed to proceed,” will have a “devastating impact” on the retail banking industry and consumer access in upstate New York, Cuomo argues.
KeyBank says it will work with the governor’s office to address his concerns.
“We wholeheartedly believe by further investing in New York we will increase our ability to better serve the people, businesses and communities of this state. We look forward to working with Governor Cuomo and his staff to address their concerns and share our commitments,” Therese J Myers, the bank’s spokesperson, said in an email response to a BJNN inquiry.
Contact Reinhardt at ereinhardt@cnybj.com
