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M&T Bank Corp. plans to acquire Hudson City Bancorp Inc., in a $3.7 billion stock and cash deal that will add 135 branches, primarily in New Jersey, officials said Monday.
Some 97 of the Hudson City branches are in New Jersey, with 29 in downstate New York and nine in Connecticut. There is little overlap with existing M&T branches in those areas, M&T said.
The combined network of 870 branches will stretch from Connecticut to Virginia, adding deposits of $25 billion and loans of $28 billion.
Based in Paramus, N.J., Hudson City has assets of $43.6 billion. Buffalo-based M&T has assets of $80.8 billion. Hudson City will be merged into holding company subsidiary M&T Bank.
“As a thrift, Hudson City focused primarily on deposits and mortgages,” M&T chairman and CEO Robert Wilmers said.
As part of M&T, the acquired branches will provide a range of checking and savings accounts, debit and credit cards, home equity loans, small business and commercial banking services, and wealth management and corporate trust services, he added.
M&T expects to repay some $13 billion of Hudson City’s long-term borrowings by liquidating its investment portfolio, officials.
The merger has been approved by the boards of directors at each bank but needs approvals from shareholders and regulators.
Under terms of the agreement, each Hudson City share will be valued at 0.08403 of an M&T share. The transaction will be split between 60 percent in common stock and 40 percent cash, officials said.
“This merger creates tremendous opportunities to build on the success that each company has achieved individually in its own markets,” Hudson City chairman and CEO Ronald Hermance Jr. said.
M&T shares were up 5 percent in early afternoon trading, in the range of $90 per share. Shares of Hudson City were up 16 percent, to $7.50.
M&T, with local deposits of $3.4 billion, is on track to be the largest bank in the Rochester market following the departure of HSBC Bank USA N.A. earlier this year.
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