FINANCE

PROJECT OF CORPORATE FINANCE ON ACQUITION OF AIB BANK WITH M&T BANK

SUBMITTED TO: Sir Hamid

SUBMITTED BY:
GROUP MEMBERS NAMES ROLL NO.

Abdul Basit Ehsah Asad Nawaz Ali Afraz Sher Usman Mohammad Shahbaz Muthera Hafeez

10-158 10-108 10-148 10-109 10-134 10-131

MBA 3rd Semester(S.S) UNIVERSITY OF SARGODHA

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Page # 01 Dedication. 02 Acknowledgement 03

HISTORY 1.1 M&T BANK 1.2 AIB BANK 05 07 03 04

04 ACQUITION
2.1 HISTORY 2.2 REASONS 09 10

05 FINANCIAL REPORTS
3.1 M&T BANK 3.2 AIB BANK 3.3AFTER ACQUITION 11 13 16 19 21 21

06 DIVIDEND HISTORY 07 SHARE HOLDER PRICE 08 ADVANTAGES OF ACQUITION 09 10 11 SUBSIDIARY COMPANY HOLDING COMPANY ENTITY

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This humble effort is dedicated to my honorable

Who did their best to uplift me to the heights of an ideal life and whose affections inspired me to love mankind and to respect others.

Who built my moral and made possible for me to achieve the highest of ideal life

Who have helped me in preparing an internship and always me in all type of matters.

ACKNOWLEDGEMENTS:

I have no words to express my deepest sense of gratitude to ALLAH who blessed and enabled me to complete this project.

Firstly, I feel my proud privilege to towards our affectionate parents and inspired me for higher and morally throughout my studies.

mention the feelings of obligations and friends, who prayed, encouraged education and are supporting financially

Lastly I find it very difficult to select the words of appropriate dimensions to express my gratitude to my SME instructor Sir Hamid for his useful encouragement and dynamic supervision In writing these acknowledgements, we look back on several importance of this course OPERATIONAL MANAGEMENT.

History Of M&T Bank:

M&T Bank traces its origins to the founding of Manufacturers and Traders Bank in Buffalo, New York. As a result of mergers, acquisitions and name changes, M&T Bank Corporation's principal bank is now known as Manufacturers and Traders Trust Company, or M&T Bank. M&T Bank reorganized under a bank holding company in 1969 called First Empire State Corporation. The name was changed in 1998 to M&T Bank Corporation, whose common stock is listed on the New York Stock Exchange and trades under the symbol "MTB."

M&T Bank Corporation had $68 billion in assets as of December 31, 2010, and is one of the 20 largest commercial bank holding companies in the U.S. M&T Bank has over 725 branches & 1,800 ATM's across Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, New Jersey, Washington, D.C., and Ontario, Canada.

Type

Public (NYSE: MTB) S&P 500 Component

Industry

Banking Financial services

Founded

1856

Headquarters

Buffalo, New York

Key people

Robert G. Wilmers, Chairman

Mike Pinto, Vice Chairman Mark J. Czarnecki, President

Finance and insurance Consumer Banking Corporate Banking Investment Banking Products Investment Management Global Wealth Management Private Equity Mortgages Credit Cards

Revenue

$3.773 billion (2009)

Net income

$379 million (2009)

Total assets

$68.880 billion (2009)

Total equity

$7.752 billion (2009)

Employees

13,639 (2009)

Website

www.mtb.com

History Of Allied Irish Bank:

Allied Irish Banks Limited was formed in 1966 as a new company that acquired three Irish banks: Provincial Bank of Ireland, the Royal Bank of Ireland, and the Munster & Leinster Bank. The banks saw an alliance as the best way to overcome the fragmented nature of the Irish banking industry. Ireland in the mid-1960s was changing fast and the merger strengthened the banks position in the emerging global business era. Allied Irish Bank (AIB) is a major commercial bank based in Ireland.AIB is one of the so called "Big Four" commercial banks in the state. AIB offers a full range of personal and corporate banking services. AIB Capital Markets is the division of the company that offers international banking and treasury operations. The bank also offers a range of general insurance products such as home, travel, and health insurance. It offers life assurance and pensions through its wholly owned subsidiary, Ark Life Assurance. In December 2010 the Irish government took a majority stake in the bank. AIB shares are listed as an American Depositary Receipt (ADR) on the New York Stock Exchange, under the symbol AIB. AIB's shares were formerly traded on the Irish Stock Exchange and the London Stock Exchange, but its shares were delisted from these exchanges following its effective nationalisation.The remaining publicly-traded shares of AIB are now listed on the Enterprise Securities Market of the Irish Stock Exchange.

Type

Partially State-owned

Founded

1966

Headquarters

Dublin, Ireland

David Hodgkinson, Chairman Key people Colm Doherty, Group Chief Executive

Products

Banking products

Revenue

4.868 billion (2007)

Operating income

2.508 billion (2007)

Net income

2.248 billion (2007)[1]

Employees

24,000 (2004)

Website

www.aib.ie

Merger & Acquisition:

When two companies combine together voluntarily is called merger.Merger is a combination of two firms into one,with the acquirer assuming assets and liabilities of the target firm. Acquisition is a take over of firm by purchase of that firms common stock and assets. Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture.The terms merger and acquisition mean slightly different things.When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition.A merger refers to a combination of two or more companies, usually of not greatly disparate size, into one company.A merger is a combination of equals.

Take Over:
When two companies combine together unvoluntarily is called takeover.In business, a takeover is the purchase of one company (the target) by another.Take over is a tool to change management.

ACQUISITION OF STRATEGIC STAKE IN M&T BANK CORPORATION. DISPOSAL OF Allied Irish Bank
AIBs US subsidiary, AIB, was acquired by M&T on April 1, 2003. AIB received 26.7 million M&T shares, representing a stake of approximately 22.5% in the enlarged M&T, together with US$ 886.1 million in cash. The agreement allowed for the cash consideration to be reduced by the amount of a pre-close dividend from AIB to AIB and prior to closing a dividend of US$ 865.0 million was declared and paid by AIB. Consequently, the cash consideration payable by M&T reduced to US$ 21.1 million.

In 2003, M&T Bank acquired AIB Bank of Baltimore hun, a subsidiary of Allied Irish Banks (NYSE: AIB. AIB was acquired by M&T after the John Rusnak currency trading scandal produced a loss of $691 million that was discovered in early 2002. The Allfirst acquisition was M&T's largest, both in terms of assets acquired and as a percentage of M&T's prior asset size.
The transaction is accounted for in accordance with the Urgent Issue Task Force Abstract No. 31 Exchanges of businesses or other non-monetary assets for an interest in a subsidiary, joint venture or an associate (UITF 31). Under UITF 31, the transaction is accounted for as an exchange of 77.5% of AIB for 22.5% of M&T pre-merger. Under this approach, the 22.5% of AIB that is owned by AIB, both directly before the transaction and indirectly thereafter, is treated as being owned throughout the transaction. The total recognized gains arising from the transaction amounted to 449 million (after tax) and was reflected in the accounts for the year ended December 31, 2003 as follows:(Euro millions) in

Gain recognized on the disposal of AIB Recognized in the statement of income Recognized in the statement of total recognized gains and losses

(40 489 449

The transaction gave rise to a profit before tax of 1 million (loss of 40 million after tax). In accordance with the requirements of UITF 31, the unrealized element of the gain, of 489 million, has been recognized in the statement of total recognized gains and losses. The consolidated statement of income for the year ended December 31, 2002 reflects the consolidation of AIB for a full year, while the statement of income for the year ended December 31, 2003 reflects the consolidation of AIB for the period to March 31, 2003. To facilitate comparisons to the year ended December 31, 2004 financial statements presented in this Annual Report, the consolidated statements of income for the years ended December 31, 2003 and December 31, 2002, split between continuing and discontinued activities (arising from the disposal of AIB Bank. on April 1, 2003), have been presented in the Additional Financial Information section on page 187 of this Annual Report.

Consummation Date APR - 03

Target

Deposits Acquired/ Assets Deposits Primary M&T ($MM) ($MM) Market(s) Deposits 11,598 Baltimore 53.1%

Allfirst 16,491 Financial

REASONS FOR ACQUISITIONS:

To increase diversification
The acquisition of related businesses can generate synergy among the companies, and the acquisition of counter-cyclical businesses can reduce the risks associated with economic, technological, regulatory, or competitive shocks.

To increase market power

There is an advantage to being big

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Current Income Statement:

Key M&T Bank Corporation Financials
Company Type Fiscal Year-End 2010 Sales (mil.) 2010 Employees Public December $3,837.9 13,365

M&T Bank Corporation Income Statement

Dec 10 Revenue Cost of Goods Sold Gross Profit Gross Profit Margin SG&A Expense Depreciation & Amortization Operating Income Operating Margin Nonoperating Income Nonoperating Expenses Income Before Taxes Income Taxes Net Income After Taxes Continuing Operations Discontinued Operations Total Operations 3,837.9 -3,837.9 -1,112.9 58.1 ---% --1,092.8 356.6 736.2 736.2 -736.2 Dec 09 3,773.3 -3,773.3 -1,136.6 64.3 ---% --519.3 139.4 379.9 379.9 -379.9 Dec 08 4,216.6 -4,216.6 -992.9 66.6 ---% --739.8 183.9 555.9 555.9 -555.9

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Total Net Income Net Profit Margin Diluted EPS from Total Net Income Dividends per Share

736.2 19.2% 5.69 2.80

379.9 10.1% 2.89 2.80

555.9 13.2% 5.01 2.80

All amounts in millions of US Dollars except per share amounts.

M&T Bank Corporation Balance Sheet

Assets Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets Liabilities Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Noncurrent Liabilities Total Liabilities Shareholder's Equity -80.9 --7,840.2 51,823.4 59,663.6 -230.9 --10,240.0 50,887.5 61,127.5 -2,039.2 --12,075.1 46,955.9 59,031.0 1,010.0 4,138.1 ---435.8 67,585.4 68,021.3 Dec 10 1,359.6 4,131.6 ---435.8 68,444.6 68,880.4 Dec 09 1,557.1 3,633.3 ---388.9 65,426.9 65,815.8 Dec 08 Dec 10 Dec 09 Dec 08

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Preferred Stock Equity Common Stock Equity Total Equity Shares Outstanding (thou.) Data Definitions

740.7 7,617.0 8,357.7 119,702.6

730.2 7,022.7 7,752.9 118,222.7

567.5 6,217.3 6,784.7 110,286.0

All amounts in millions of US Dollars except per share amounts.

M&T Bank Corporation Cash Flow Statement

Dec 10 Net Operating Cash Flow Net Investing Cash Flow Net Financing Cash Flow Net Change in Cash Depreciation & Amortization Capital Expenditures Cash Dividends Paid 1,676 475.4 (2,463.6) (312.6) 58.1 (70.5) (375.5) Dec 09 1,189 2,501.7 (4,012.9) (321.8) 64.3 (59.0) (357.7) Dec 08 1,628 (2,263.8) 435.9 (199.4) 66.6 (72.2) (308.5)

All amounts in millions of US Dollars except per share amounts.

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Dividend History
Details of dividends paid to AIB shareholders since 1990. Financial Year (ending) Dividend Per Share* 30.6c 0.0c 30.6c 27.8c 51.2c 79.0c 25.3c 46.5c 71.8c 23.0c 42.3c 65.3c 20.90c 38.5c 59.4c 19.00c 35.00c 54.00c 17.25c 31.81c 49.06c 15.40c 28.40c 43.80c 13.50c 25.25c 38.75c 11.85c 21.85c 33.70c 10.29c 17.78c 28.06c
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Payment

Payment Date 26-Sep-08

2008 (December) Interim Final Total 2007 (December) Interim Final Total 2006 (December) Interim Final Total 2005 (December) Interim Final Total 2004 (December) Interim Final Total 2003 (December) Interim Final Total 2002 (December) Interim Final Total 2001 (December) Interim Final Total 2000 (December) Interim Final Total 1999 (December) Interim Final Total 1998 (December) Interim Final Total

25-Sep-07 23-Apr-08 26-Sep-06 10-May-07 23-Sep-05 27-Apr-06 24-Sep-04 28-Apr-05 26-Sep-03 30-Apr-04 27-Sep-02 25-Apr-03 28-Sep-01 26-Apr-02 27-Sep-00 26-Apr-01 29-Sep-99 20-Apr-00 25-Sep-98 31-Mar-99

1997 (December) Interim Final Total 1996 (December) Interim Final Total 1995 (December) Interim Final Total 1994 (December) Interim Final Total 1993 (December) Interim Final Total 1993 (December) Interim Final Total 1992 (December) Interim Final Total

8.63c 13.84c 22.47c 7.56c 11.49c 19.05c 6.60c 9.78c 16.38c 5.84c 8.13c 13.97c 5.21c 7.17c 12.38c 5.21c 7.17c 12.38c 4.83c 5.33c 10.16c

24-Sep-97 23-Apr-98 30-Sep-96 27-Mar-97 29-Sep-95 02-May-96 11-Oct-94 27-Apr-95 07-Oct-93 12-May-94 07-Oct-93 12-May-94 10-Dec-92 06-May-93

(change to December year end - 9 month period only) 1991/1992 (March) 1990/1991 (March) Interim Final Total Interim Final Total 4.57c 5.90c 10.48c 4.44c 5.40c 9.84c 12-Dec-91 09-Jul-92 12-Dec-90 11-Jul-91

* pre 1999 numbers are euro equivalent converted @ 0.787564

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Share Price:

Saturday 14th January 2012

Stock Last Last Change High Low Volume Exchange updated

Dublin ESM (EUR)

0.06 -0.00% 0.06 0.06 375,722 08:56

ADVANTAGES:
As a result of the merger, M&T becomes the 18th largest commercial bank headquartered in the U.S.M&T Bank now operates more than 700 branches and1,600 ATMs in Maryland, New York, Pennsylvania, Virginia, West Virginia and the District of Columbia. AIB Group Chief Executive Michael D. Buckley, AIB Group Director of Finance Gary Kennedy, and former Allfirst Chairman and CEO Eugene J. Sheehy have joined the Boards of Directors of M&T and M&T Bank. A fourth AIB designee will also join the Boards of Directors of M&T and M&T Bank in due course. Mr. Sheehy also became an Executive Vice President of M&T and Chairman and CEO of M&T Bank's Mid-Atlantic Division. Mr. Sheehy will continue to be based in Baltimore along with M&T Executive Vice President Atwood Collins III, President and COO of the Mid-Atlantic Division.

"With this merger, Allfirst joins forces with a financial services institution long-known for quality, consistency and success. Together, we are creating an even stronger institution that will benefit our customers and communities,"
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Subsidiary company (Allied Arish Bank)

A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock.The subsidiary can be a company, corporation or limited liability company. In some cases it is a government or state-owned enterprise.The controlling entity is called its parent company parent, or holding company.AIB is a subsidiary company because it own less than 50% of shares.

Holding company (M&T Bank)

A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.M&T bank is a holding company because it own more than 50% of shares.

Entity:
An entity is something that exists by itself, although it need not be of material existence. In particular, abstractions and legal fictions are usually regarded as entities.After acquisition of M&T Bank and Allied Irish Bank,Allied Irish Bank loose his entity.

PROXY CONTEST:
Approval of the issuance of 26,700,000 shares of M&T Bank Corporation common stock to Allied Irish Banks, p.l.c. in connection with an Agreement and Plan of Reorganization, dated as of September 26, 2002, by and among M&T Bank Corporation, Allied Irish Banks, p.l.c. and Allfirst Financial Inc. pursuant to which M&T Bank Corporation will acquire all of the issued and outstanding shares of Allfirst Financial Inc. and Allfirst Financial Inc. will then merge with and into M&T Bank Corporation.

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M&T ANNOUNCES SHAREHOLDER APPROVAL OF ALLIED IRISH BANK ACQUISITION (PROXY CONTEST)
BUFFALO, N.Y., Dec 16, 2002 (BUSINESS WIRE) -- M&T Bank Corporation ("M&T") (NYSE:MTB) announced that, at a special meeting held today, its shareholders approved the acquisition of Allfirst Financial, Inc. ("Allfirst") by M&T. A special meeting of shareholders of Allfirst's parent company, Allied Irish Banks, p.l.c. ("AIB") (NYSE:AIB), is scheduled to be held at AIB Bank Center in Dublin, Ireland on Wednesday, December 18, 2002 at 11 a.m. (6 a.m. Eastern Standard Time), when AIB's shareholders will also vote on the proposed merger. Pending regulatory approvals and the approval of AIB's stockholders, the acquisition is expected to be completed in the first quarter of 2003. It will expand M&T Bank to approximately 700 offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, Delaware and Washington, D.C., with pro forma assets of approximately $49 billion, and M&T will rank among the 20 largest banks in the United States.

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