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 ALBANY, N.Y., and CLEVELAND, Oct. 4 /PRNewswire/ -- KeyCorp (NYSE: KEY) and Society Corporation (NYSE: SCY), two of America's highest performing banking companies, today jointly announced the signing of a definitive agreement by which KeyCorp and Society will merge. The new KeyCorp will be headquartered in Cleveland. Consummation of the transaction is subject to the approvals of the shareholders of both KeyCorp and Society Corporation as well as the appropriate regulatory authorities. Closing of the merger is anticipated early in 1994.
 The KeyCorp/Society combination will be one of the largest mergers in U.S. banking history, creating the 10th largest bank holding company in the nation with $58 billion in total assets in a franchise with almost 1,400 offices spanning 18 states.
 Victor J. Riley, Jr., 62, KeyCorp's chairman, president and chief executive officer, will be the new company's chairman and chief executive officer. Robert W. Gillespie, 49, chairman and chief executive officer of Society Corporation, will become president and chief operating officer until Dec. 31, 1995, when he will succeed Riley as chief executive officer. Riley will continue as chairman through 1998. Riley and Gillespie will lead an 18-member executive management team which is comprised of nine managers from each company. A new 22-member board of directors will be established with 11 members each from Society and KeyCorp.
 Headquarters for the new company will be located in the 57-story Society Center in Cleveland, where Society Corporation and its lead bank, Society National Bank, are located. KeyCorp is based in Albany, N.Y., as is its lead bank, Key Bank of New York.
 Commenting on the proposed merger, Riley said, "Creating a dynamic banking company from the strong organizations that KeyCorp and Society have built over the years should enable us to make major strides forward in efficiently
providing enhanced and innovative banking services to our customers. We look forward to this unique opportunity to fashion an exemplary organization for the future. On a personal note, I cannot imagine any better answer than Bob Gillespie to the question of who is to be my successor."
 Gillespie noted, "KeyCorp and Society bring complementary strengths and consistently high performance to this merger. This strategic partnership will create a financial institution with a national presence, fully able to perform and compete in the challenging era that lies ahead in the banking industry. We are convinced that our customers will see many service and product improvements, that our employees will enjoy enhanced career opportunities, that our communities will see us as even better neighbors and our stockholders will enjoy greater returns for their investment. Finally, I look forward to forging a strong partnership with a visionary leader like Victor Riley."
 Under terms of the agreement, KeyCorp shareholders will receive 1.205 common shares of the new company for each of their KeyCorp shares. Society shareholders will retain their existing number of shares. This will result in the combined company having outstanding approximately 244 million common shares, taking into account pending acquisitions. The transaction has an indicated total value of $7.8 billion, based on the Friday, Oct. 1, 1993 KeyCorp common stock closing price of $38.50 per share and the Society Corporation closing price of $32.50 per share.
 KeyCorp and Society have granted each other options to purchase up to 19.9 percent of the outstanding shares of each other's common stock to be exercisable under certain conditions relating to the acquisition of KeyCorp or Society Corporation by an entity other than KeyCorp or Society. KeyCorp has adopted a Shareholder Protection Rights Plan similar to the existing Society Shareholder Rights Plan. In conjunction with this motion, the KeyCorp board declared a dividend of one Right on each outstanding share of KeyCorp common stock. The dividend will be paid on Nov. 1, 1993 to shareholders of record on Oct. 15, 1993. Society Corporation's board of directors has received a fairness opinion from CS First Boston and KeyCorp's board of directors has received a fairness opinion from Salomon Brothers Inc. Separate shareholder meetings are tentatively planned around year-end 1993 to vote on the proposed merger.
 It is currently expected that a one-time restructuring charge of $90 million to $110 million will be incurred in the fourth quarter of 1993 in connection with the merger, representing the estimated costs of consolidating the operations of the two banking organizations. In addition, as the result of efficiencies gained from the merger, annualized savings of $80 million to $105 million are expected by the first quarter of 1995.
 KeyCorp and Society rank among the best performing banking companies in the nation by a host of key measures. For the second quarter of 1993, Society, which had total assets of nearly $26 billion, ranked as the leading superregional banking company with a return on total assets of 1.52 percent and return on common equity of 20.39 percent. During that same period, KeyCorp, which has assets of $32 billion, posted a strong 1.27 percent return on assets and 18.94 percent return on common equity. On a combined pro forma basis, second quarter results would have shown a return on assets of 1.38 percent and return on common equity of 19.75 percent, which would have ranked the combined company among the best in the financial services industry.
 The combined banking franchise is geographically diverse. KeyCorp has offices in New York, Alaska, Colorado, Idaho, Maine, Oregon, Utah, Washington, and Wyoming, while Society has offices in Ohio, Florida, Indiana, and Michigan.
 The new company will possess a diverse income stream, especially in fee-income businesses. KeyCorp's major strengths include a long tradition of serving small-to medium-sized businesses and a strong mortgage banking capability. Society operates one of the nation's largest investment management businesses and has broad specialty finance and large corporate banking expertise. The new company will also be well-positioned to offer an expanded array of investment and insurance products to keep pace with an increasingly sophisticated customer base.
 Both Society and KeyCorp share traditions of strong credit quality and an array of common technologies which will ensure a smooth and timely merger transition. Both foster a commitment to serve retail needs in local markets and place decision making close to the customer.
 -0- 10/4/93
 /CONTACT: Analysts: Don Kauth of KeyCorp, 518-487-4491, or Jay Gould of Society, 216-689-4721; Media: Susan Peterson of KeyCorp, 518-486-8258, or John Fuller of Society, 216-689-8140/

CO: KeyCorp, Society Corporation ST: New York, Ohio IN: FIN SU: TNM

BM -- CL010 -- 8134 10/04/93 08:00 EDT
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Publication:PR Newswire
Date:Oct 4, 1993

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