First Niagara-HSBC Branch Deal Coming To Conclusion

January 3, 2012 Updated Jan 3, 2012 at 9:10 AM EDT

By WKBW News
By Business First by Allissa Kline, Buffalo Business First Reporter

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First Niagara-HSBC Branch Deal Coming To Conclusion

January 3, 2012 Updated Jan 3, 2012 at 9:10 AM EDT

BUFFALO, NY ( Business First ) The buyers of 26 HSBC Bank branches that First Niagara Financial Group Inc. must sell may be known within the next 30 days, a First Niagara spokesperson said Friday.

First Niagara, in the midst of trying to close its $1 billion acquisition of 195 HSBC branches across Upstate New York, agreed in November to sell the branches to satisfy U.S. Department of Justice antitrust issues. All 26 branches are located in Western New York in Erie, Niagara and Orleans counties.

The bank initially hoped to announce buyers by the end of the year, plus identify which other HSBC branches around the state it plans to sell or lease. But there have been other moving parts to address, including the completion of a multi-step offering that generated $1.1 billion through three separate capital-raising initiatives.

"The successful completion of our recent offering, coupled with the high-level of interest we have received for our Justice Department-required and discretionary divestitures, enables us to be well on our way to closing and integrating our two strong branch networks in the second quarter of 2012," the spokesperson said. "Our divestiture process continues to advance and we expect to reach and announce purchase agreements with buyers in the next 30 days."

First Niagara said it is "very pleased" with the quality of bidders expressing interest in buying HSBC branches. It did not name specific bidders.

First Niagara announced the pending acquisition July 31. The sale will end HSBC's retail operations in all parts of the state, except for New York City. HSBC officials have said the bank plans to retain its commercial banking presence in Buffalo at the HSBC Atrium, but there is no word on whether it will maintain its position as anchor tenant of One HSBC Center at the foot of Main Street. Its lease expires in the fall of 2013.

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