BREAKING NEWS: Chittenden Bank to be sold for $1.9 billion

BRIDGEPORT, Conn. -- People's United Financial Inc. said today it agreed to buy Chittenden Corp., Vermont's largest bank, for $1.9 billion in cash and stock, or $37 per share.

Bridgeport, Conn.-based People's United, which operates 160 branches in Connecticut, said the deal will create the "premier regional banking franchise in New England."

The purchase price, which is comprised of 55 percent cash and 45 percent stock, represents a 31 percent premium to Chittenden's Tuesday closing share price of $28.24.

Burlington-based Chittenden operates a number of banks with $6.4 billion in total assets and about 130 branches in Vermont, Massachusetts, New Hampshire and Maine. Chittenden's $4.7 billion in loans consist mostly of commercial loans and residential mortgages.

The boards of both companies have approved the deal. The banks expect the deal to close in the first quarter of next year, pending shareholder approvals.