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UPDATE 1-M&T Bank to buy People's United Financial in $7.6 bln deal

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(Adds details on deal, background)

Feb 22 (Reuters) - M&T Bank Corp has agreed to buyPeople's United Financial Inc in an all-stock dealvalued at about $7.6 billion, expanding its branch network andcreating a regional bank with about $200 billion in assets.

The combined bank will have a network of more than 1,100branches and over 2,000 ATMs across 12 U.S. states, M&T Banksaid in a statement on Monday.

Under the deal, People's United shareholders will receive0.118 shares of M&T common stock for each People's United sharethey own. The offer implies a 13% premium to People's United'sclosing price on Friday.

"The merger extends our reach by providing customers accessto a larger banking network and an expanded array of services,"People's United Chief Executive Officer Jack Barnes said.

A loosening of financial regulations and lowering ofcorporate taxes under former U.S. President Donald Trumpprompted regional lenders to pursue scale through deals.

Spain's BBVA agreed to sell its U.S. business toPNC Financial Services Group Inc for $11.6 billion incash in one of the biggest global bank deals last year.

Founded in 1842, People's United Bank, a unit of People'sUnited Financial, offers commercial and retail banking servicesthrough a network of more than 400 retail locations.

Buffalo, New York-headquartered M&T said it expects the dealto boost its earnings per share by 10-12% in 2023 while reducingannual costs by about $330 million.

The deal is expected to close in the fourth quarter of 2021.

Lazard acted as financial advisor to M&T, while Keefe,Bruyette & Woods served as lead financial advisor to People'sUnited.(Reporting by Noor Zainab Hussain in Bengaluru; Editing byKrishna Chandra Eluri and Aditya Soni)