TD Bank Group scraps $13.4bn acquisition of First Horizon Corporation

TD Bank Group and US-based First Horizon Corporation have mutually agreed to scrap their previously announced $13.4 billion deal under which the Canadian banking group planned to acquire the latter.

The deal has been terminated as TD Bank Group owing to regulatory uncertainty.

TD Bank Group said that it has notified First Horizon that it does not have a timetable for securing regulatory approvals for reasons not related to the latter.

Because of the uncertainty regarding when and if regulatory approvals are granted, the parties subsequently decided to end the merger deal.

Bharat Masrani — TD Bank Group President and CEO said: “This decision provides our colleagues and shareholders with clarity.  Though disappointed with the outcome, we move forward with a strong, growing franchise in the United States, servicing more than 10 million customers across our footprint.”

TD Bank Group scraps $13.4bn acquisition of First Horizon Corporation. Photo courtesy of Tdorante10/Wikimedia Commons.

As per the terms of the termination agreement, TD Bank Group will make a payment of $200 million in cash to First Horizon. This adds to the existing fee of $25 million fee reimbursement that is due for the American banking group in accordance with the merger agreement announced in February 2022.

Shares of First Horizon’s Series G Preferred Stock that were bought by TD Bank will continue to reflect a conversion cost that is $25 per share. The parties will not pay any other charges or have other obligations to each other as a result of the merger agreement.

Bryan Jordan — First Horizon Chairman, President, and CEO said: “While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability.

“Our strong capital position, disciplined credit quality, expense control measures, and well-diversified and stable funding mix have enabled our business to navigate challenging banking industry dynamics and remain focused on executing our client-centric growth plan.”