Toronto-Dominion Bank (TD) has agreed to buy First Horizon Corp. (FHN) for $13.4 billion U.S. as it expands its presence in the U.S.
The Canadian bank will pay $25 U.S. a share in cash for Memphis, Tennessee-based First Horizon, according to a news release. The purchase price is 37% higher than First Horizon’s closing share price last Friday (February 25).
The deal, which continues the bank’s pattern of growing in the U.S. through acquisitions, is Toronto-Dominion’s largest takeover ever.
First Horizon has 412 branches and more than 1.1 million individual and business customers across 12 U.S. states. It has leading positions in Tennessee and Louisiana; a presence in Florida, the Carolinas and Virginia; and footholds in Atlanta, Dallas and Houston.
The acquisition of First Horizon will move Toronto-Dominion beyond its current U.S. East Coast footprint and give it scale in key existing markets such as Florida. The deal would make Toronto-Dominion’s U.S. franchise into one of the nation’s top six banks, with about $614 billion U.S. in assets.
The deal also gives Toronto-Dominion additional capabilities in commercial banking and adds scale to its fixed-income sales and trading business.
First Horizon shares surged 30% to $23.75 U.S. on news of the deal, while Toronto-Dominion’ stock fell 1.2% to $103.44.
Toronto-Dominion said it doesn’t plan to close any of First Horizon’s branches and that it will retain the bank’s frontline bankers. The deal is expected to close in the first quarter of Toronto-Dominion’s fiscal 2023, which starts in November of this year.