People’s United Bank operates 25 branches in New Hampshire, all of which will become part of M&T Bank
The parent company of Buffalo-based M&T Bank has agreed to acquire Connecticut-based People’s United Bank for a deal valued at $7.6 billion.
The boards of both companies have approved the merger, which is expected to close in the fourth quarter of 2021, the banks said in a statement this morning.
The all-stock transaction would create a combined company with approximately $200 billion in total assets and branches from Maine to Virginia. People’s United’s current headquarters in Bridgeport will become the New England regional headquarters for M&T, the banks said in the statement. M&T Bank, with about $140 billion in assets, has 25 New Hampshire branches, largely in the southern half of the state.
“M&T is a like-minded partner that shares our culture of supporting communities by focusing on building meaningful relationships and providing personalized products, services and local market expertise to customers, while building on our legacy of excellence in service,” Jack Barnes, chairman and CEO of People’s United, said in the statement. “The merger extends our reach by providing customers access to a larger banking network and an expanded array of services. I am confident our shared community banking philosophies will provide significant long-term value for our shareholders, employees and loyal customers.”
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, the banks said. Former People’s United shareholders will own about 28 percent of the combined company once the transaction is complete. Based on closing prices on Feb. 19, the banks said the transaction is valued at approximately $7.6 billion.
After the merger is complete, Barnes, Senior Executive Vice President Kirk Walters and three other current members of People’s United’s board will join M&T’s board. René Jones, M&T Bank’s chairman and CEO, will lead the combined company, the bank said in a statement.
Jones said in a conference call this morning that the merger is about expanding markets for both banks, noting that it was a “growth story” more than a deal to cut expenses.
Once the merger is complete, the combined geographic area will represent 20 percent of the U.S. population and 25 percent of the country’s gross domestic product, Jones said. He added that the footprint will be concentrated, with the geographic center point no more than 300 miles from the furthest branch in each direction.
“When Jack [Barnes] and I were having discussions about whether this made sense or not, one of the things that we both saw was that this creates multiple paths to achieving a scale presence in all of the key New England markets, the fastest path for either one of us to gain share over time,” Jones said during the call. “And that was one of the things that was really compelling for us.”
People’s United’s outsize proportion of core operating accounts makes it among the most attractive franchises in New England, Jones said, and indicates a characteristic of a stable, well run franchise.
The combination would create a bank with approximately $200 billion in assets. M&T Bank is currently the 23rd largest bank in the U.S., and the deal would move it up to the 13th largest bank, analysts from Keefe, Bruyette & Woods said in a note today., adding that the deal would make the combined company the second largest bank in the Northeast and Mid-Atlantic region with 1,135 branches. KBW, which served as People’s United’s lead financial adviser on the transaction, said the deal appears reasonably priced.
The acquisition is the first for M&T Bank since 2015. People’s United has been active in recent years with acquisitions of United Bank, Belmont Savings Bank and Farmington Bank.
