Enter multiple symbols separated by commas

People's United to Buy Chittenden for $1.9 Billion

People's United Financialsaid on Wednesday that it would buy Chittenden for $1.9 billion in cash and stock, combining one of Connecticut's largest banks with one of Vermont's largest.

The transaction values Chittenden at about $37 per share, a 31 percent premium over its Tuesday closing price of $28.24 on the New York Stock Exchange.

Chittenden shareholders will receive $20.35 plus 0.8775 times the average closing price of People's United in the five days prior to closing.

People's United said it will pay 55 percent of the purchase price, or roughly $1 billion, in cash.

Chittenden, the Burlington, Vermont-based parent of Chittenden Bank, has $6.6 billion of assets, $5.5 billion of deposits and more than 50 branches. Founded in 1904, the company said it is its home state's largest bank.

Bridgeport, Connecticut-based People's United, which operates People's United Bank, is one of that state's largest banks, with $14 billion of assets and 160 branches.

The 165-year-old company received $3.44 billion of proceeds in April when it completed a conversion from mutual ownership to a public company.

People's United expects the transaction to close in the first quarter of 2008 and add immediately to earnings. It expects a 13 percent internal rate of return, higher than its cost of capital.

Morgan Stanley and the law firms Cleary Gottlieb Steen & Hamilton and Thacher Proffitt & Wood advised People's United. Lehman Brothers, JPMorgan and the law firm Goodwin Procter advised Chittenden.

People's United shares closed Tuesday at $18.71 on the Nasdaq.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Lottery ticket

    A thief who broke into the car of a Seattle couple left behind a million-dollar lottery ticket, NBC News reports.

  • The Lamborghini SpA Urus SUV.

    There's no shortage of luxury vehicle choices, but increasingly the wealthy are opting for high-end SUVs instead of traditional models.

  • Mike Trout #27 of the Los Angeles Angels takes a picture with fans before a game with Boston Red Sox at Fenway Park on May 23, 2015 in Boston, Massachusetts.

    MLB is using digital media initiatives like Snapchat and Web video to connect with younger viewers. Is it enough?

U.S. Video

  • Cramer: Here's the no. 1 play in cybersecurity

    Guarding Your Portfolio? "Mad Money" host Jim Cramer's got the number one pick for protection services in today's digital world.

  • Underestimate Cisco at own peril: Cramer

    Mad Money's Jim Cramer takes a look at the cybersecurity space to see if it could also protect your money.

  • Fly with LUV?

    While remaining profitable, Gary Kelly, Southwest Airlines chairman and CEO, tells Mad Money's Jim Cramer the company continues to focus on being a great airline and offering great customer service.