| Item 1.01 | Entry into a Material Definitive Agreement. |
Merger Agreement
On April 7, 2021, Eastern Bankshares, Inc. (the “Company”) entered into a definitive merger agreement with Century Bancorp, Inc. (“Century”) under which the Company will acquire Century for $641.9 million in cash (the “Merger Agreement”). Century is the stock holding company of Century Bank and Trust Company, a Massachusetts-chartered stock bank headquartered in Medford, Massachusetts with $6.4 billion in assets, $5.4 billion in deposits and 27 full-service branches in Massachusetts as of December 31, 2020. Pursuant to the terms of the Merger Agreement, Century Bank and Trust Company will merge with and into Eastern Bank, the wholly-owned subsidiary of the Company, upon completion of the transaction. The transaction is subject to customary closing conditions, including the receipt of regulatory approval and Century shareholder approval. The Company currently expects the merger to be completed during the fourth quarter of 2021. The Merger Agreement has been unanimously approved by the Boards of Directors of each of the Company and Century.
Under the terms of the Merger Agreement, at the effective time of the merger, (i) each holder of Century Class A common stock will receive a cash payment of $115.28 per share of Century Class A common stock and (ii) each holder of Century Class B common stock will receive a cash payment of $115.28 per share of Century Class B common stock.
The affirmative vote of the holders of a majority of Century Class A common stock and Century Class B common stock, voting separately by class, is required to approve the Merger Agreement. The approval of the Company’s shareholders is not required.
The Merger Agreement contains various representations, warranties and covenants that the Company and Century made to each other as of specific dates. The assertions embodied in those representations, warranties and covenants contained in the Merger Agreement were made solely for purposes of the contract between the Company and Century, are solely for the benefit of the parties to the Merger Agreement, are not intended as statements of fact to be relied upon by shareholders or other security holders of the Company, and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement. Moreover, the representations and warranties are subject to a contractual standard of materiality that may be different from what may be viewed as material to stockholders, and the representations and warranties may have been used to allocate risk between the Company and Century rather than establishing matters as facts. The Company may waive one or more covenants in whole or in part without notice to shareholders of the Company.
The Merger Agreement provides each of the Company and Century with certain termination rights. If the merger is not consummated under specified circumstances, including if the Company or Century terminates the Merger Agreement under certain circumstances and Century enters into an alternative merger transaction within 12 months of the termination, Century has agreed to pay the Company a termination fee in the amount of approximately $25.7 million.
The foregoing summary of the Merger Agreement is not complete and is qualified in its entirety by reference to the complete text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and which is incorporated by reference in its entirety.
Voting Agreement
Simultaneously with the execution of the Merger Agreement, Century’s directors and executive officers and certain of their affiliates have entered into voting agreements with the Company to vote in favor of the Merger Agreement (collectively, the “Voting Agreements”) at special meeting of Century shareholders to be held for such purpose. In the aggregate, the Century shareholders who have entered into the Voting Agreements control the right to vote 2.5% of the Class A common stock and 93.2% of the Class B common stock. The Voting Agreements terminate upon the termination of the Merger Agreement in accordance with their respective terms.
The foregoing description of the Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Voting Agreement, which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Safe Harbor Statement
The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This Current Report on Form 8-K contains forward-looking statements that involve a number of risks and uncertainties, including the approvals and probable timing of the completion of the proposed merger transaction contemplated in this report (“Transaction”). These forward-looking statements represent the Company’s expectations as of the date of this report. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from these forward-looking statements as a result of various important factors, including those set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent filings with the Securities and Exchange Commission (the “SEC”). Factors relating to the proposed Transaction that could cause or contribute to actual results differing materially from expected results include, but
