On Monday, Scotiabank (BNS.TO, BNS) announced it has reached an agreement to acquire approximately a 14.9% pro-forma ownership stake in KeyCorp, a financial services firm, through an issuance of shares priced at $17.17 each. The total cash consideration for this transaction is approximately $2.8 billion.
The share price reflects an 11% premium over the volume-weighted average price for the last 20 trading days.
Scotiabank anticipates that the transaction will be accretive to its earnings per share within the first full year following the completion of the additional investment.
The initial investment, comprising a 4.9% stake, is expected to close in the fourth quarter of fiscal 2024, while the additional investment of about 10% is projected for fiscal 2025.
Scott Thomson, CEO of Scotiabank, stated, "This strategic investment in KeyCorp, a premier U.S. bank, significantly enhances the capital deployed to our prioritized markets."
KeyCorp operates across 15 states, managing $187 billion in assets and approximately 1,000 branches that offer commercial and retail banking, investment advice, and other services.
