Cleveland-based KeyCorp said on Friday it will buy Buffalo-based First Niagara Financial for $4.1 billion, one of the largest deals among U.S. regional banks this year.
KeyCorp offered $11.40 per share - 0.68 of its shares and $2.30 in cash — for each First Niagara share, representing a premium of 9.8 percent to the stock's close on Thursday.
KeyCorp said the combined company will have about $99.8 billion in deposits, $83.6 billion in loans and 1,366 branches across 15 states.
Three of First Niagara's board members will join KeyCorp's board after the deal closes.
KeyCorp said it expects the deal to add to its earnings in 2017.
Morgan Stanley and KeyBanc Capital Markets are financial advisers to KeyCorp and J.P. Morgan Securities advised First Niagara.
Shares of First Niagara were up 3 percent in premarket trading immediately following the announcement. (Get the latest quote here.)