Scotiabank announces agreement to acquire 14.9% equity interest in KeyCorp
Scotiabank has announced an agreement to acquire a 14.9% equity stake in KeyCorp, a premier U.S. financial services company, for approximately US$2.8 billion. The investment will be completed in two stages: an initial 4.9% investment and an additional 10% investment. This strategic move is expected to be accretive to earnings per share in the first full year following the closing of the additional investment.
The transaction will significantly increase Scotiabank's capital deployment in priority markets and create future opportunities in the North American corridor. Upon completion, Scotiabank will have the right to designate two individuals to serve on KeyCorp's Board of Directors. The CET1 ratio impact is estimated to be approximately 10 basis points at the closing of the initial investment and a further 40 to 45 basis points at the closing of the additional investment.
Scotiabank ha annunciato un accordo per acquisire una partecipazione azionaria del 14,9% in KeyCorp, una delle principali compagnie di servizi finanziari degli Stati Uniti, per circa 2,8 miliardi di dollari statunitensi. L'investimento sarà completato in due fasi: un investimento iniziale del 4,9% e un ulteriore investimento del 10%. Questa mossa strategica si prevede che sarà accretiva per l'utile per azione nel primo anno intero successivo alla conclusione del secondo investimento.
La transazione aumenterà significativamente il dispiegamento di capitale di Scotiabank nei mercati prioritari e creerà future opportunità nel corridoio nordamericano. Al termine dell'operazione, Scotiabank avrà il diritto di designare due individui per far parte del Consiglio di Amministrazione di KeyCorp. Si stima che l'
Scotiabank ha anunciado un acuerdo para adquirir una participación del 14,9% en KeyCorp, una destacada empresa de servicios financieros de EE.UU., por aproximadamente 2.8 mil millones de dólares estadounidenses. La inversión se realizará en dos etapas: una inversión inicial del 4,9% y una inversión adicional del 10%. Se espera que este movimiento estratégico sea acreativo para las ganancias por acción en el primer año completo posterior al cierre de la inversión adicional.
La transacción aumentará significativamente la asignación de capital de Scotiabank en mercados prioritarios y creará oportunidades futuras en el corredor norteamericano. Una vez completada, Scotiabank tendrá el derecho de designar a dos personas para servir en la Junta Directiva de KeyCorp. Se estima que el impacto en el ratio CET1 será de aproximadamente 10 puntos básicos al cierre de la inversión inicial y de otros 40 a 45 puntos básicos al cierre de la inversión adicional.
스코샤은행은 약 28억 달러 미국 달러에 미국의 주요 금융 서비스 회사인 KeyCorp의 14.9% 지분 인수 계약을 발표했습니다. 투자는 두 단계로 완료될 예정이며: 초기 4.9% 투자와 추가 10% 투자입니다. 이 전략적 조치는 추가 투자가 완료된 후 첫 번째 전체 연도의 주당순이익을 증가시킬 것으로 예상됩니다.
이번 거래는 스코샤은행의 주요 시장에서의 자본 배치를 크게 증가시키고 북미 지역에서의 미래 기회를 창출할 것입니다. 거래가 완료되면 스코샤은행은 KeyCorp 이사회에 두 명의 인사를 임명할 권리를 갖게 됩니다. CET1 비율에 미치는 영향은 초기 투자 완료 시 약 10bp로, 추가 투자 완료 시 40~45bp로 예상됩니다.
Scotiabank a annoncé un accord pour acquérir une part de 14,9% dans KeyCorp, une entreprise de services financiers de premier plan aux États-Unis, pour environ 2,8 milliards de dollars américains. L'investissement se déroulera en deux étapes : un investissement initial de 4,9% et un investissement supplémentaire de 10%. Ce mouvement stratégique devrait être porteur pour le bénéfice par action au cours de la première année complète suivant la finalisation de l'investissement supplémentaire.
La transaction augmentera considérablement le déploiement de capital de Scotiabank sur les marchés prioritaires et créera des opportunités futures dans le corridor nord-américain. Une fois finalisée, Scotiabank aura le droit de désigner deux personnes pour siéger au Conseil d'Administration de KeyCorp. L'
Scotiabank hat eine Vereinbarung zur Übernahme einer 14,9%igen Beteiligung an KeyCorp, einem führenden US-Finanzdienstleistungsunternehmen, für etwa 2,8 Milliarden US-Dollar angekündigt. Die Investition wird in zwei Phasen durchgeführt: eine anfängliche Investition von 4,9% und eine zusätzliche Investition von 10%. Dieser strategische Schritt wird voraussichtlich den Gewinn pro Aktie erhöhen im ersten vollen Jahr nach Abschluss der zusätzlichen Investition.
Die Transaktion wird das Kapitalengagement von Scotiabank in prioritären Märkten erheblich erhöhen und zukünftige Chancen im nordamerikanischen Korridor schaffen. Nach Abschluss wird Scotiabank das Recht haben, zwei Personen in den Vorstand von KeyCorp zu benennen. Der Einfluss auf das CET1-Verhältnis wird zum Zeitpunkt des Abschlusses der ersten Investition auf etwa 10 Basispunkte und bei Abschluss der zusätzlichen Investition auf weitere 40 bis 45 Basispunkte geschätzt.
- Acquisition of 14.9% stake in KeyCorp for US$2.8 billion
- Expected to be accretive to earnings per share in the first full year
- Increases capital deployment in priority U.S. markets
- Right to designate two individuals to KeyCorp's Board of Directors
- Creates future opportunities in the North American corridor
- CET1 ratio impact of 50-55 basis points total
- Suspension of discount on Shareholder Dividend and Share Purchase Plan
Insights
This strategic investment by Scotiabank in KeyCorp is a significant move that expands their presence in the U.S. market. The
Key financial implications include:
- Expected earnings accretion in the first full year after closing
- CET1 ratio impact of ~10 bps for initial investment and 40-45 bps for additional investment
- Suspension of discount on Shareholder Dividend and Share Purchase Plan
This move aligns with Scotiabank's strategy to increase capital deployment in priority markets, potentially yielding attractive returns and creating future opportunities in the North American corridor.
Scotiabank's investment in KeyCorp is a strategic play in the U.S. banking sector. KeyCorp's presence across 15 states with
The deal structure, with an initial
This investment may spark similar moves by other Canadian banks looking to expand their U.S. presence, potentially leading to increased cross-border banking consolidation.
The Scotiabank-KeyCorp deal presents interesting regulatory considerations. The transaction's two-stage structure (4.9% initial investment followed by ~10% additional investment) is likely designed to navigate U.S. banking regulations, which typically require heightened scrutiny for stakes exceeding 5%.
Key legal aspects include:
- Regulatory approvals required for both investment stages
- Board representation rights upon completion of additional investment
- Potential antitrust review given the size and nature of the transaction
The deal's success hinges on regulatory clearances. Scotiabank's existing U.S. presence as a top 10 foreign banking organization may factor into regulators' assessment. The transaction's structure and timing suggest careful consideration of legal and regulatory requirements.
KeyCorp is a premier
The Investment will be completed in two stages—an initial investment of
"This strategic investment in KeyCorp, a premier bank in the
Scotiabank is one of the top 10 foreign banking organizations in the
Transaction Highlights:
Subject to clearances and regulatory approvals, the Initial Investment of
Upon completion of the Additional Investment, Scotiabank will have the right to designate two individuals to serve on KeyCorp's Board of Directors; one senior officer of Scotiabank and one third party director designated by Scotiabank and reasonably acceptable to KeyCorp.
The Initial Investment will be recorded as an equity investment at fair value, with subsequent mark to market changes through other comprehensive income. On completion of the Additional Investment, the approximately
The CET1 ratio impact at closing of the Initial Investment is estimated to be approximately 10 basis points and is estimated to be a further 40 to 45 basis points at the closing of the Additional Investment.
At this time, and until such time the Bank elects otherwise, the Bank intends to suspend the discount on its Shareholder Dividend and Share Purchase Plan effective for dividends to be declared subsequent to the declaration expected on August 27, 2024. Consequently, this will be the last dividend that will be eligible to participate in the discount.
Conference Call
Scotiabank will host a conference call on August 12, 2024, at 9:00 a.m. ET. The call will end promptly at 9:30 a.m. ET. Interested parties are invited to access the call live:
- Via telephone, in listen-only mode, at 416-641-6104 or 1-800-952-5114 (
North America toll-free) using access code 3001700#. Please call shortly before 9:00 a.m. ET. - On the Investor Relations page at www.scotiabank.com/investorrelations.
A telephone replay will be available between Monday, August 12 to Thursday, September 12, 2024, by calling 905-694-9451 or 1-800-408-3053 (
The archived webcast will be available on the Investor Relations page at www.scotiabank.com/investorrelations following the call.
Advisors
Bank of America and Scotiabank are serving as financial advisors, and Cravath, Swaine & Moore LLP is serving as legal counsel to Scotiabank.
About Scotiabank
Scotiabank's vision is to be our clients' most trusted financial partner, to deliver sustainable, profitable growth and maximize total shareholder return. Guided by our purpose: "for every future," we help our clients, their families and their communities achieve success through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With assets of approximately
About KeyCorp
KeyCorp's roots trace back nearly 200 years to
Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,200 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout
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SOURCE Scotiabank
FAQ
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