M&T Bank and People’s United Financial entered into a definitive agreement under which M&T will acquire People’s United in an all-stock transaction.
The combined company will create a banking franchise with approximately $200 billion in assets and a network of more than 1,100 branches and more than 2,000 ATMs that spans 12 states from Maine to Virginia and Washington D.C. As part of the transaction, People’s United’s current headquarters in Bridgeport, CT, will become the New England regional headquarters for M&T.
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. The implied total transaction value based on closing prices on Feb. 19, 2021, is approximately $7.6 billion. René Jones, chairman and CEO of M&T Bank, will lead the combined company in the same capacity.
“In People’s United, we have found a partner with an equally long history of serving and supporting customers, businesses and communities,” Jones said. “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.”
“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. “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.”
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.
Upon closing, Barnes, Kirk Walters and three other current members of the board of directors of People’s United will join M&T’s board of directors.
The merger was unanimously approved by the boards of directors of each company. The merger is expected to close in Q4/21, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the shareholders of each company.
Lazard acted as financial advisor to M&T in connection with the transaction and Sullivan & Cromwell served as legal advisor. Keefe, Bruyette & Woods, a Stifel Company, served as lead financial advisor to People’s United. J.P. Morgan Securities also served as financial advisor and Simpson Thacher & Bartlett served as legal advisor to People’s United.