Source: AFJ – Monday, Feb. 28, 2022, 11:40 AM
On Monday morning, TD Bank Group and First Horizon announced that they have signed a definitive agreement for TD to acquire First Horizon in an all-cash transaction valued at $13.4 billion or $25 for each common share of First Horizon.
Through what it noted as a financially compelling transaction, TD said it is accelerating its long-term growth strategy in the United States by acquiring what it calls a “premier regional bank with an aligned culture and risk-management framework.”
The banks said the transaction is expected to close in the first quarter of TD’s 2023 fiscal year and is subject to customary closing conditions, including approvals from First Horizon’s shareholders and U.S. and Canadian regulatory authorities.
If the transaction does not close prior to Nov. 27, officials said First Horizon shareholders will receive, at closing, an additional $0.65 per share on an annualized basis for the period from Nov. 27 through the day immediately prior to the closing.
Officials added the transaction will terminate, unless otherwise extended, if it does not close by Feb. 27, 2023.
TD said it expects to use excess capital on its balance sheet for the transaction, “reflecting its robust capital and liquidity position.”
TD Bank Group president and chief executive officer Bharat Masrani said: “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.
“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,” Masrani continued.
Following the closing of the transaction, First Horizon president and chief executive officer Bryan Jordan will join TD as vice chair of TD Bank Group, reporting to Masrani and will join the TD senior executive Team. He will also be named to the boards of directors of TD’s U.S. banking entities as a director and chair.
The announcement indicated Jordan will continue to be based in Memphis, Tenn.
“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. This is a true growth story,” Jordan said. “We have long respected TD as a leader in U.S. banking and are confident that its continued and growing investments in our local markets will extend our long history of community support.
“Thank you to our First Horizon associates for their efforts and dedication to our clients and communities as we continue to deliver for them every day,” he continued. “We look forward to successfully completing this transaction and are excited to join TD.”
Masrani added: “I am very pleased that Bryan and talented leaders from across First Horizon will join TD. 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.”
On a pro forma basis excluding merger adjustments, the announcement highlighted TD’s U.S. franchise will be a top 6 U.S. bank, with approximately $614 billion in assets and a network of 1,560 stores, serving more than 10.7 million U.S. customers across 22 states.
First Horizon is headquartered in Memphis, Tenn., with assets of $89 billion as of Dec. 31. First Horizon operates 412 branches and serves more than 1.1 million consumer, business and commercial customers across 12 states.
TD said it will benefit from First Horizon’s strong regional presence, including leadership positions in Tennessee and Louisiana, additional density in Florida, the Carolinas and Virginia, and important footholds in the attractive Atlanta, Dallas and Houston markets.
“First Horizon and TD share a common belief that we can only thrive when the communities in which we live and work thrive. TD is committed to growing our presence and investments across the states in which First Horizon operates,” Masrani said.
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