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Scotiabank has signed a deal to buy a minority stake in U.S. bank KeyCorp.
The Canadian bank will pay a total of about US$2.8 billion for a 14.9 per cent take in the company in two stages.
Under the agreement, Scotiabank will acquire its stake through the issuance of a total of 163 million KeyCorp common shares in two tranches at a price of US$17.17 per share.
The banks say Scotiabank will make an initial investment of US$800 million for a 4.9 per cent stake that is expected to close in its fourth quarter, subject to clearances and regulatory approvals.
The deal will be followed by an additional investment of US$2 billion for a 10 per cent stake that is expected to close in fiscal 2025.
KeyCorp operates in 15 states, with about 1,000 branches offering commercial and retail banking and investment advice and services.
This report by The Canadian Press was first published Aug. 12, 2024.
Companies in this story: (TSX:BNS)
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