BUFFALO, N.Y. (WIVB) — Jobs could be on the line if the Cleveland-based Key Bank acquires western New York-based First Niagara Bank, and local lawmakers are expressing skepticism on the deal.
In the U.S., thousands are employed at roughly 400 First Niagara Bank locations. Those banks compete with KeyCorp’s Key Bank branches, often in close proximity, so U.S. Senator Chuck Schumer is speaking out, noting jobs could be lost in the deal.
“The proposed acquisition of First Niagara by Key Bank, on initial examination, seems extremely troubling because the banks overlap so much and merging may entail significant job losses and reduce competition across Upstate New York,” Schumer said.
According to Key Bank officials, the process isn’t fleshed out enough to attempt to give specific numbers on employee cuts or locations.
“Speculating on numbers now would not be fair to our clients, communities or employees,” Therese Myers, vice president of external communications for Key Bank, said. “Our leadership is committed to telling employees what they know, when they know it.”
Local experts, however, like Anthony Ogorek, a wealth management consultant, said the impact on western New York’s job climate could be significant.
“Larkinville is probably going to take a bit of a hit, because they’re not going to need all those people down there,” Ogorek said.
First Niagara operates across New York, Pennsylvania, Connecticut and Massachusetts. The Associated Press reported KeyCorp is offering a portion of its stock along with $2.30 in cash for each share of First Niagara, totaling $11.40 per share of the Buffalo-based company. That’s a 10 percent premium on First Niagara’s $10.38 share value.
However the deal may get held up, as Schumer said his concerns could cause him to take action.
“I am seriously considering opposing this merger, but will await getting some details from the CEO of Key Bank, as to the specifics of their plan and how it would affect jobs in (western New York),” Schumer said.
Schumer may get his answer, as Key Bank officials will be in New York throughout the upcoming week to hammer out more details on the merger.
A merger between the two banking giants would create the 13th largest commercial bank in the United States, however it could create some issues for branding, including one major sponsorship — the First Niagara Center.
“With regard to the First Niagara Center, Key Bank will honor First Niagara’s contract for the duration,” Myers said. “When the contract comes up for renewal, we will evaluate it, just as we evaluate any of our sponsorship renewals. It’s still too premature to say whether the name will change.”