TORONTO — 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.