The blockbuster move will see the bank become the sixth largest in the US by deposits
Toronto-Dominion (TD) Bank is set to complete a $17-billion deal to acquire the US-based First Horizon Corp., a purchase that will reportedly see the Canadian banking giant become the sixth-largest bank in the US by deposit.
The announcement marks the latest stage in TD’s expansion in the US, with the acquisition – priced at US$25 a share for a total of US$13.4 billion – bolstering the company’s presence in the country’s southeastern markets and strengthening its commercial banking capabilities.
TD has tapped into the considerable store of capital it’s amassed in the last several years to fund the purchase, with First Horizon boasting about $89 billion in assets and 412 branches spread across 12 states including Tennessee, where it’s headquartered.
The deal, which is still subject to regulatory approval, would see TD take its place as the US’s sixth biggest bank by deposits, according to Bloomberg.
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The company’s CEO Bharat Masrani, speaking shortly after the news was announced, said it had been “looking at this for a while” and hinted at the continued opportunity that existed in the American market.
“The markets in which we are operating [after purchasing First Horizon], there’s a combined population of 123 million people. That is three times Canada,” he said.
“That is what is attractive to us: scale, strategically aligned to what we do, and this is where we can create value.”
The purchase is likely to be fully ratified and completed by the first quarter of TD’s 2023 fiscal year, with the bank having agreed to pay a premium equal to 5.4 cents per share until closure if it does not finalize the deal by November 27.
The bank is due to release its financial results for this year’s first quarter on Thursday (March 03).
