Federal Reserve Approves M&T’s Acquisition of Hudson City: The Federal Reserve’s Approval Order Highlights the Regulatory Implications of Transactions to Potential Buyers and Sellers

Sullivan & Cromwell LLP - September 30, 2015

Earlier today, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued its order (the “Order”) approving M&T Bank Corporation’s (“M&T”) acquisition of Hudson City Bancorp, Inc. and its wholly owned subsidiary, Hudson City Savings Bank (collectively “Hudson City”). This acquisition transaction has been long-pending and much watched.

The Order comes over three years after the transaction was announced publicly and the related application with the Federal Reserve was filed.  The Order highlights the regulatory implications of transactions to potential buyers and sellers, including the possibility of being forced to disclose compliance issues publicly.  The circumstances that led to the delayed approval also reinforce the importance of carefully evaluating regulatory risks presented by merger transactions and counterparties.
However, as noted in our recent Memorandum to Clients here, the transaction’s time to approval is a major outlier given that over 90% of the applications approved by the Federal Reserve Board itself are approved within 6 to 12 months.