Berkshire Hills Bancorp, the Massachusetts-based bank, has signed a deal to acquire The Connecticut Bank and Trust Company for approximately $30 million.

CBT records $283 million in assets as of 30 June 2011 and operates eight branches in the Greater Hartford area. Under the terms of agreement, 70 per cent of CBT's outstanding shares will be exchanged for Berkshire shares at a fixed ratio of 0.3810 Berkshire shares for each CBT share. The remaining 30 per cent shall be exchanged for cash at $8.25 per share. The sale price is based on Berkshire's average closing rate of $7.90 per CBT share on 21 October. 

"As we considered our strategic alternatives, there were compelling reasons for us to enter this partnership. This combination provides a very attractive immediate return to our shareholders and a positive outlook for the long term performance of Berkshire's stock," said David Lentini, president and chief executive of CBT. 

Berkshire currently has some $4 billion in assets and more than 60 branches in Massachusetts, New York and Vermont. The merger is expected to increase its Hartford/Springfield branch network to 20. The agreement will only be deemed complete upon the approval of CBT's shareholders and concerned regulatory agencies and is expected to be finalized by the second quarter of 2012.