First Niagara plans to acquire NewAlliance for $1.15 billion, expanding into New England

First Niagara to buy NewAlliance for $1.15B

BUFFALO, N.Y. — Regional bank First Niagara Financial Group Inc. is buying NewAlliance Bancshares Inc. of Connecticut for $14.09 per share, or $1.15 billion, the banks said Thursday.

Shares of NewAlliance rose $1.42, or 12 percent, to close at $12.78, while the stock of First Niagara fell 83 cents, or 6.5 percent, to $11.95.

The banks say the deal represents a 24-percent premium over the NewAlliance’s closing price of $11.36 Wednesday.

The transaction will create a top-25 U.S. bank by assets, which will total $29 billion. That includes more than $14 billion in loans and $18 billion in deposits.

The deal will be a cash-and-stock transaction with each NewAlliance shareholder receiving either 1.10 shares of First Niagara stock, cash, or a combination for each NewAlliance share.

First Niagara said the combination allows it to expand its presence in the Northeast. Currently, it serves upstate New York and Western and Eastern Pennsylvania through 255 branches.

NewAlliance has 88 branches in Connecticut and Massachusetts and employs 1,200 workers. Its headquarters in New Haven, Conn., will become First Niagara’s New England regional center. All of NewAlliance’s branches will be rebranded as First Niagara locations.

First Niagara also will add three NewAlliance directors to its board and increase the number of directors to 12 from nine.

The deal is expected to close in the second quarter of next year, subject to approval by regulators and shareholders. Both companies’ boards have already approved the transaction.