NEW YORK: Toronto-Dominion Bank Group will buy First Horizon Corp for $13.4 billion in cash to expand its footprint in the southeastern United States, the banks said on Monday, in a record acquisition for the Canadian lender.
The deal is the culmination of a concerted hunt for U.S. acquisitions by TD, the second-largest bank by market value in Canada, and follows unsuccessful bids for other U.S. assets that have come up for sale in recent months.
TD will pay $25 for each First Horizon share, a 37% premium to the target’s last close. Shares of Memphis-based First Horizon were up nearly 32% in premarket trading.
The deal will help TD’s U.S. franchise emerge among the top six U.S. banks, with about $614 billion in assets and a network of 1,560 branches, serving over 10.7 million U.S. customers across 22 states, the bank said. TD is currently the No. 8 bank in the United States by assets, with most of its operations located in the northeast and Florida. The deal will be funded entirely with TD’s excess capital.
“We are positive on the transaction as it not only deploys TD’s significant excess capital profitably but also infills its South-Eastern platform and extends around the Gulf Coast,” Barclays Analyst John Aiken said in a note.
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