M&T Bank Corp., which counts Warren Buffett's Berkshire Hathaway Inc. among its largest investors, agreed to buy Hudson City Bancorp to expand in New Jersey in a deal valued at about $3.7 billion.
Under terms of the agreement, each Hudson City shareholder will receive 0.08403 of an M&T share in the form of either M&T stock or cash.
M&T, based in Buffalo, New York, will gain 135 branches, including 97 in New Jersey, becoming the fourth-largest in the state by deposit share. Hudson City is led by Chief Executive Officer Ron Hermance, 65, who returned to the Paramus, New Jersey-based bank Aug. 1 after taking medical leave in February to receive a bone-marrow transplant.
The deal for Hudson City, which is known for home loans and certificates of deposit, creates a "comprehensive community banking franchise that provides a full range of checking and savings accounts, debit and credit cards, home equity loans and other lending options, plus small business and commercial banking services," M&T CEO Robert G. Wilmers said in the statement.
Hudson City was the largest U.S. bank to forgo a government bailout.
JPMorgan Chase & Co. is Hudson City's banker on the deal, while Sullivan & Cromwell LLP provided legal advice. M&T is using Evercore Partners Inc. and Wachtell, Lipton, Rosen & Katz.