Scotiabank has announced the purchase of a 14.9% stake in American regional lender KeyCorp for $2.8 billion. This strategic move allows the Canadian bank to tap into the U.S. regional banking sector for growth, as its domestic market becomes increasingly saturated. Scotiabank’s offer of $17.17 per share represents a 17.5% premium over KeyCorp’s last closing price, leading to a 14% surge in KeyCorp’s shares.
With this investment, Scotiabank will appoint two directors to KeyCorp’s board, becoming its largest investor by 2025. Scotiabank’s CEO, Scott Thomson, highlighted the focus on North American markets, emphasizing that this low-risk investment offers strong returns. The deal will unfold in two stages: an initial 4.9% stake followed by an additional 10%.
KeyCorp plans to leverage Scotiabank’s presence across North America to explore opportunities in investment banking, wealth management, and payments.