TD Bank Acquires Bank Holding Company First Horizon for $13.4B

Toronto-Dominion Bank Group on Monday (Feb. 28) agreed to purchase First Horizon Corp. for $13.4 billion in cash to fuel its expansion across the southeastern United States after several failed attempts to break into the market, according to a Reuters report.

To close the deal, TD will pay $25 for each First Horizon share, a 37% premium on the company’s closing price that will allow TD to fund the deal with its excess capital, the report said. The acquisition makes TD the sixth-largest bank in the U.S. with about $614 billion in assets across 22 states, and represents the bank’s largest deal ever.

TD’s core capital level after the deal will remain above the minimum set by the regulator, executives said. It had about C$21.6 billion ($17 billion) of excess capital as of Oct. 31. It will also trigger pretax cost savings of $610 million, and other “meaningful” revenue synergies, executives said in the report.

TD expects merger and integration costs of $1.3 billion for the First Horizon deal, has no plans to close any branches or to scale down any of First Horizon’s existing businesses, the report said.

If the deal isn’t finalized before Nov. 27, First Horizon shareholders will get another 65 cents per share on an annualized basis until the closing date.

“There have been instances where some deals have been slightly delayed,” said TD Chief Executive Bharat Masrani on the call with analysts announcing the acquisition. “So [the additional payment] does compensate First Horizon shareholders should there be a delay.”

Related: TD Bank on Tapping APIs and Partnering With FinTechs to Serve Commercial Clients

TD Bank gives customers access to banking details via APIs, enabling commercial clients to import the data into their preferred systems and work with it in the context of their operations. That same API functionality allows financial institutions (FIs) to address clients’ unique needs through FinTech partnerships.

TD Bank leverages APIs to share banking data with these FinTech services, in turn enhancing the FI’s ability to serve customers’ needs. Some FinTechs, meanwhile, aggregate data to offer customers a broader view of their finances, enabling users to see all their information in a single portal.