Connecticut AG Blumenthal Seeks Information on Sale of NewAlliance

Connecticut Attorney General Richard Blumenthal asked for justification of First Niagara Financial Group Inc.’s planned acquisition of his state’s NewAlliance Bancshares Inc.

The plan raises significant issues, including the effect on the Connecticut economy, Blumenthal said today in a letter to the banks’ presidents. He asked for information on matters including jobs that might be lost and branches that might close.

The state Banking Department may legally approve only mergers that benefit the Connecticut economy and the public, Blumenthal said in a statement.

First Niagara, based in Buffalo, New York, agreed to acquire NewAlliance, based in New Haven, Connecticut, for about $1.5 billion in cash and stock, the companies said in a statement Aug. 19. First Niagara said it will have $29 billion in assets, ranking it among the 25 biggest U.S. lenders.

“My focus is particularly on jobs and small businesses -- whether people will lose jobs or businesses sources of lending -- and the economy in general,” Blumenthal said in the statement.

The deal would be the largest takeover of an operating U.S. commercial bank since PNC Financial Services Group Inc. agreed to buy Cleveland-based National City Corp. in October 2008, according to data compiled by Bloomberg.

New England Push

First Niagara, founded in 1870, is pushing into New England after completing at least nine acquisitions of banks or branches in the past decade.

Leslie Garrity, a First Niagara spokeswoman, said the bank looks forward to Blumenthal’s becoming more familiar with the proposed merger.

“We are confident that he will learn that First Niagara is poised to build on the strength that NewAlliance has already established in the communities it serves creating a combination that will be even stronger,” Garrity said in an e-mail.

Paul McCraven, a NewAlliance spokesman, said in an e-mail that the company anticipated that the attorney general would welcome the merger when he became familiar with “First Niagara’s track record in entering new markets, its demonstrated support for all the communities it serves, its commitment to local decision making, the new products and services it will bring to our customers and its plans to grow in New England from its regional base in New Haven.”

To contact the reporter on this story: Karen Freifeld in New York at kfreifeld@bloomberg.net.

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