LEGC Legacy Bancorp, Inc. (MM)

The U.S. Department of Justice said Berkshire Hills Bancorp Inc. (BHLB) is set to go ahead with its $110 million takeover of smaller peer Legacy Bancorp Inc. (LEGC) after the companies agreed to divest themselves of four Legacy branches in Massachusetts.

The department said that, with the divestitures, the merger wouldn't harm local retail-banking or small-business-banking competition. The acquisition still needs to be approved by the Office of Thrift Supervision.

The combined entity would be valued at almost $4 billion in assets and have a total of 69 branches in three states. It would bolster Berkshire Hills' presence in western Massachusetts and New York.

It is the second takeover agreement for Berkshire recently. It agreed to acquire Rome Bancorp (ROME) for $74 million in October.

Neither Berkshire nor Legacy shares were active in after-hours trading.

   -By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; 
   joan.solsman@dowjones.com