M&T Bank to acquire Conn. bank in $7B deal
As part of the transaction, People’s United’s current headquarters in Bridgeport, Conn., will become the New England regional headquarters for M&T, which is headquartered in Buffalo, N.Y. Delawareans are well-acquainted with M&T after it became a dominant bank here a decade ago following its acquisition of the former Wilmington Trust.
The merger was unanimously approved by the boards of both companies and is tentatively scheduled to close in the fourth quarter of 2021. It is still subject to regulatory approvals and approval by the shareholders of each company.
Under the terms of the agreement, People’s United shareholders will receive 0.118 of a share of M&T common stock for each People’s United share they own. Following completion of the transaction, former People’s United shareholders will collectively own approximately 28% of the combined company that will hold about $200 billion in assets. Five members of People’s United board will join M&T’s board after closing, officials reported.
“In People’s United, we have found a partner with an equally long history of serving and supporting customers, businesses and communities,” said René Jones, chairman and CEO of M&T, who will lead the combined company in the same capacity, in a Monday statement. “Combining our common legacies and our complementary footprints will strengthen our ability to serve our communities and customers, and provide solutions that make a difference in people’s lives. I am incredibly excited about this opportunity and look forward to welcoming new customers and team members to our M&T family.”
The larger M&T will feature 1,100 branches and more than 2,000 ATMS in 12 states. Officials noted that both banks hold top three shares in most of their respective top 10 markets, and will create a footprint in a Mid-Atlantic-to-Northeast region that accounts for over 20% of the U.S. population and over 25% of U.S. gross domestic product.
People’s United had total assets of more than $63 billion, loans of $44 billion and deposits of $52 billion, as of Dec. 31. The 179-year-old bank employs more than 6,000 in commercial and retail banking through a network of over 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management solutions.
M&T expects the transaction to be immediately accretive to its tangible book value per share. It is further expected that the transaction will be 10% to 12% accretive to M&T’s earnings per share in 2023, reflecting estimated annual cost synergies of approximately $330 million.
Lazard acted as financial advisor to M&T in connection with the transaction and Sullivan & Cromwell LLP served as legal advisor. Keefe, Bruyette & Woods, a Stifel Company, served as lead financial advisor to People’s United. J.P. Morgan Securities LLC also served as financial advisor, and Simpson Thacher & Bartlett LLP served as legal advisor to People’s United.