Shares of People’s United Financial (PBCT) - Get Report rose sharply Monday after fellow regional bank M&T Bank (MTB) - Get Report, based in Buffalo, agreed to buy Bridgeport, Conn.-based People’s for stock worth $7.6 billion.
People’s traded at $17.40, up 10.97%, in premarket trading Monday. M&T was up slightly to $149.98.
The combined company will have $200 billion in assets and a network of more than 1,100 branches and 2,000 ATMs that spans 12 states on the East Coast from Maine to Virginia.
The deal puts the combined entity at about No. 15 in the nation for assets, according to MX, a financial data company. M&T is now about No. 25, and People’s is about No. 40.
M&T’s Chief Executive Rene Jones will head the combined company, and the banks anticipate the deal will close in the fourth quarter.
“The combined franchise will operate across some of the most populated and attractive banking markets in the U.S. As part of the transaction,” the companies said in a statement “Connecticut will become the New England regional headquarters for M&T.”
Under 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 $7.6 billion valuation is based on Friday’s closing prices.
Other recent regional bank deals include PNC Financial Services (PNC) - Get Report agreeing in November to buy Banco Bilbao Vizcaya Argentaria’s (BBVA) - Get Report U.S. banking unit for $11.6 billion, and Huntington Bancshares agreeing in December to purchase TCF Financial for about $6 billion.