- 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.
- 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:
- 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 10-12% accretive to M&T's earnings per share in 2023, reflecting estimated annual cost synergies of ~$330M.
- The merger will combine similarly well-secured CRE portfolios while reducing M&T's construction, hotel, and NYC exposure.