TD Bank Group announced on Monday, Feb. 28, it has signed a definitive agreement to acquire Memphis-based First Horizon Corp. for $13.4 billion in cash.
The offer equates to about $25 per share of First Horizon common stock, which was trading about 30 percent higher to $23.70 on Monday morning.
Toronto-based TD Bank executives said the deal will accelerate its long-term growth strategy in the United States.
“First Horizon is a great bank and a terrific strategic fit for TD. It provides TD with immediate presence and scale in highly attractive adjacent markets in the U.S. with significant opportunity for future growth across the Southeast,” Bharat Masrani, group president and chief executive officer of TD, said in a release. “Working with the First Horizon team, TD will build upon the success of its strong franchise and deliver the legendary customer experiences that differentiate us in every market across our footprint.”
Bryan Jordan, president and CEO of First Horizon, will become vice chair of TD Bank Group, reporting to Masrani and will join the TD senior executive team. Jordan also will become a director on the boards of directors of TD’s U.S. banking entities , but will remain in Memphis.
“We have built a very strong business at First Horizon, and by joining forces with TD, we will create extraordinary value for our key stakeholders with a shared customer-centric strategy, enhanced scale and a broader product set for our clients,” Jordan said. “This is a true growth story.”
Jordan said First Horizon respects TD as a leader in U.S. banking and is confident that it will continue to make investments in local markets will extend First Horizon’s “long history of community support.”
“I am very pleased that Bryan and talented leaders from across First Horizon will join TD,” Masrani said. “Their deep customer and community relationships and proven success driving growth will be of tremendous value as we integrate our teams and deliver for the millions we serve,” added
Leo Salom, group head of U.S. Retail for TD Bank Group, and president and CEO of TD Bank, will lead the combined businesses.
“As one team, with complementary businesses, distribution channels and a shared culture of best-in-class customer service, we will chart the next phase of growth together,” Salom said. “The Southeastern U.S. represents a tremendous opportunity for TD and the addition of First Horizon’s commercial and specialty banking capabilities will position us as a leading national player in commercial banking.”
TD’s U.S. franchise, with headquarters in Cherry Hill, N.J., will be a top six U.S. bank with about $614 billion in assets and a network of 1,560 banking locations, serving more than 10.7 million U.S. customers in 22 states, according to the release.
First Horizon had been acquiring its own bulk, completing its most recent and largest acquisition of Louisiana-based IberiaBank – essentially a merger of equals – in July 2020. First Horizon had assets of $89 billion as of Dec. 31, 2021, with 412 branches and more than 1.1 million customers in 12 states.
The transaction will require shareholder and regulatory approvals and is expected to close in the first quarter of TD’s 2023 fiscal year. If it does not close prior to Nov. 27, 2022, First Horizon shareholders will receive, at closing, an additional 65 cents per share on an annualized basis from Nov. 27 until it does close.
