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Summary
- M&T Bank Corporation is all set to acquire People’s United Financial Inc for a deal worth over US $7 bn.
- The deal will lead to a combined asset portfolio worth over US $200 bn and help in consolidating market presence in the Northeast and mid-Atlantic regions.
- This acquisition is the latest deal in M&T bank’s ongoing tie-up spree with several regional banks, with Hudson City Bancorp Inc in 2015 being its last major deal.
New York-based M&T Bank Corporation (NYSE: MTB) plans to acquire Connecticut-based People’s United Financial Inc (NASDAQ: PBCT) for an all-stock deal worth over US $7 billion, according to the Wall Street Journal.
The agreement is expected be officially announced this week. It will lead to an over US $200 billion in assets for the combined entity with a market presence in the Northeast and mid-Atlantic states in the US. The move will aid the New York-based bank’s foray into the Boston market and in consolidating its regional presence in New York and Connecticut.
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Regional Acquisitions
This acquisition is the latest deal in M&T bank’s ongoing tie-up spree with several regional banks over the years. The deal aims to offset low interest rates, muted demand for loans and higher technology investments.
The bank’s last major acquisition was of Hudson City Bancorp Inc in November 2015. However, the deal was delayed for three years following significant weaknesses in M&T’s anti-money-laundering and consumer-compliance programs found by regulators. M&T bank had acquired assets worth over US $ 36 billion and deposits worth over US $17 billion in the takeover. The deal helped the bank gain access to the New Jersey, Connecticut, Long Island markets, and the acquisition makes up for about 24.5 per cent of M&T bank’s deposits.
M&T bank is one of the largest regional banks servicing the Northeast region. The company’s total assets were valued at US $142.6 billion by the end of last year. The bank’s portfolio comprises of over 40 per cent in commercial real-estate loans. Such loans include some of the most affected hospitality businesses based in the New York City.
Stock price
M&T Bank (NYSE: MTB) shares closed at US $149.97, up by 2.20 per cent on 19 February. Comparatively, People’s United Financial Inc. (NASDAQ: PBCT) stock prices closed at US $15.68, up by 2.28 per cent as of 19 February.
Moreover, M&T bank’s shares rose by 18 per cent year-to-date as of 19 February closing, thus, boosting its market valuation to US $19.2 billion. Similarly, People’s United Financial stock prices soared by 21 per cent on a y-t-d basis, valuing the bank at US $6.7 billion for the same period.
