Peoples United Financial has agreed to take over LSB Corporation in an all-cash transaction worth around $96 million.

Under the terms of the deal, shareholders of LSB will be entitled to receive $21 in cash for each LSB common stock share, which represents approximately 153 per cent of its tangible book value of $13.77 each as of 31 March 2010. Combined entity will have over 300 retail banking offices and 400 ATMs serving clients across New England.

"The merger with People's United will provide our customers with numerous added products and services that we have been unable to provide. These new services include wealth management, brokerage, retirement planning services, insurance services and expanded commercial loan capacity," said Gerald T Mulligan, the president and chief executive officer of LSB, in a statement.

Mulligan will maintain an advisory role to People's United Financial when the deal closes.

People's United has $22 billion in consolidated assets, while LSB has assets of approximately $807 million. The transaction is expected to be completed by the fourth quarter of this year.