M&T Bank Corp has agreed to buy People's United Financial Inc in an all-stock deal valued at about $7.6 billion, expanding its branch network and creating a regional bank with about $200 billion in assets.

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

Under the deal, People's United shareholders will receive 0.118 shares of M&T common stock for each People's United share they own. The offer implies a 13% premium to People's United's closing price on Friday.

"The merger extends our reach by providing customers access to 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 of corporate taxes under former US President Donald Trump prompted regional lenders to pursue scale through deals.

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

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

Buffalo, New York-headquartered M&T said it expects the deal to boost its earnings per share by 10-12% in 2023 while reducing annual 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's United.