M&T Bank & People's United Financial merger inked on paper

Feb. 22, 2021 7:44 AM ETM&T Bank Corporation (MTB)MTBBy: Khyathi Dalal, SA News Editor45 Comments
  • M&T Bank (NYSE:MTB) and People's United Financial (NASDAQ:PBCT) inked a definitive agreement under which M&T will acquire People's United in an all-stock transaction.
  • Combined company's footprint extends to covering over 20% of the U.S. population and over 25% of U.S. GDP.
  • Merger expected to close in 4Q21.

Agreement terms:

  • Under agreement terms, People's United shareholders will receive 0.118 of a share of M&T common stock for each People's United share they own.
  • Post transaction completion, former People's United shareholders will collectively own ~28% of the combined company.
  • Based on Feb.19 closing prices, implied total transaction value is ~$7.6B.

Transaction's financial impact:

  1. M&T expects the transaction to be immediately accretive to its tangible book value per share.
  2. It is further expected that the transaction will be 10-12% accretive to M&T's earnings per share in 2023, reflecting estimated annual cost synergies of ~$330M.
  3. The merger will combine similarly well-secured CRE portfolios while reducing M&T's construction, hotel, and NYC exposure.

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