American bank holding company M&T Bank Corp. is close to finalizing a deal to acquire People's United Financial Inc. Sources familiar with the matter said that the deal could be valued at more than $7 billion.

The same sources said the two companies were in the final stages of the all-stock deal which could be announced soon. If the deal goes through the combined entity would have assets of more than $200 billion.

New York-based M&T Bank currently has a market capitalization of around $19 billion while the Connecticut-based People's United has a value of roughly $6.6 billion.

Both banks operate in the Northeast and mid-Atlantic regions. M&T Bank's acquisition of People's United is expected to facilitate the former's planned expansion into the Boston and Connecticut markets.

M&T Bank is one of the largest regional lenders in the Northeast with more $142.6 billion in assets as of December 2020. The bank has 780 branches across the region including branches in Maryland, Delaware, New Jersey, New York, Virginia and Washington.

People's United is smaller with about 450 branches in Massachusetts, Maine, New Hampshire and Vermont. The pandemic affected its operations last year with the bank previously announcing that it would be closing down 140 branches located inside Stop & Shop grocery stores.

The acquisition would be M&T Bank's first takeover since it acquired Hudson City Bancorp in 2015. That deal encountered hurdles and was delayed for nearly three years. Banking regulators held off the deal owing to several "significant weaknesses" it had found in M&T Bank's consumer-compliance and anti-money laundering programs.

There have been several regional bank mergers as the industry consolidates to better compete with larger national players. Last year, Huntington Bancshares merged with TCF Financial. Other mergers concluded in previous years included deals between First Citizens Bancshares and CIT Group, PNC Financial Services Group and Spain's BBVA, and BB&T and SunTrust.