M&T Bank buying People’s United in $7.6B all-stock deal

4 mins read
M&T Bank buying People's United in $7.6B all-stock deal

Pedestrians pass the New York Stock Exchange, Wednesday, Jan. 27, 2021, in New York. Stocks are opening higher on Wall Street following three straight days of losses. The S&P 500 rose 0.2% in the first few minutes of trading Friday, Feb. 19. (AP Photo/John Minchillo, File)

M&T Bank Corp. is buying People’s United Financial Inc. in an all-stock deal valued at about $7.6 billion.

Branches of the two regional banks are sprinkled throughout the Northeast and mid-Atlantic.

People’s United shareholders will receive 0.118 of a share of M&T common stock for each share they own. People’s United shareholders will collectively own approximately 28% of the combined business.

The combined company will have approximately $200 billion in assets and a network of more than 1,100 branches and more than 2,000 ATMs in 12 states from Maine to Virginia and the District of Columbia.

M&T had been active in acquisitions, but People’s United would be the first major deal in almost six years.

People’s headquarters in Bridgeport, Connecticut will serve as the New England regional headquarters for M&T.

The deal, expected to close in the fourth quarter, still needs a sign-off from shareholders of both companies.

Shares of People’s United rose 8.4% before the market open Monday.

Companies Mentioned in This Article

Compare These Stocks  Add These Stocks to My Watchlist 

7 Stocks That Will Help You Forget About the Fed

Normally when the Federal Reserve (i.e. the Fed) makes an announcement, the market reacts predictably. That’s due, in large part, to the nature of what the Fed normally announces. Will interest rates go up, down, or remain unchanged? And for their part, the markets have a pretty good idea what the Fed will do before they do it.

But the Fed’s announcement of August 26 was a little different. They talked briefly about interest rates (they’re staying really low for a long time). But they were more concerned about inflation. Well, the Fed is always concerned about inflation, but this time they really mean it. Basic economics says that low-interest rates should spur inflation.

However, the market has been defying conventional wisdom and the Fed is not getting the inflation they want. So the Fed has basically said that they’re letting inflation go rogue. If it goes above their target 2% rate, so be it. The Fed is done trying to hit a target.
At first, the markets cheered the news. Not only was the Fed not taking away the punch bowl, but they were also going to keep the low rate liquidity going for a long time!

But after a little while to digest things, investors are realizing they have to be grown-ups about this. And now investors are considering how to rebalance their portfolios for the remainder of 2020.

I don’t know about them, but if I were you I would target companies that have a high free cash flow (FCF). Whether it’s your personal finances or in evaluating a stock, cash flow is your friend.

When a corporation has high FCF, they have more strong growth in good markets and more flexibility during when the economy is weaker.

As institutional investors come back into the market, it’s time for you to reposition your portfolio for whatever comes next.

View the “7 Stocks That Will Help You Forget About the Fed”.