New York Gov. Andrew M. Cuomo on Wednesday asked federal regulators to block KeyCorp's proposed buyout of First Niagara Financial Group Inc. and threatened legal action, saying the deal would be devastating for Upstate New York.

The merger, Mr. Cuomo said, would cut competition and would "likely push consumers to rely on non-bank alternatives, such as payday loans and check-cashing, which come with higher consumer transaction costs."

Further, he said, it could cost thousands of jobs.

"Blocking this deal is the right thing to do--plain and simple," Mr. Cuomo said in a statement.

Cleveland-based Key disclosed in October it had agreed to buy First Niagara in a deal valued at about $4.1 billion.

Both companies have scheduled special meetings on March 23 for shareholders to vote on the proposal.

Representatives from the banks weren't immediately available for comment.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

February 10, 2016 16:55 ET (21:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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