- TD Bank Group’s (TD) $13.4 billion acquisition of First Horizon may be further delayed due to pending regulatory approvals
- The bank announced the agreement to acquire U.S.-based First Horizon Corp. back on February 28, 2022, in an all-cash transaction valued at US$25.00 for each common share of First Horizon
- The closing of the transaction is subject to customary closing conditions, including approvals from U.S. and Canadian regulatory authorities, which now are not expected to be obtained prior to May 27, 2023
- Toronto Dominion Bank (TD) was down 2.47 per cent, trading at C$88.42 per share
TD Bank Group’s (TD) $13.4 billion acquisition of First Horizon may be further delayed due to pending regulatory approvals.
The bank announced the agreement to acquire U.S.-based First Horizon Corp. back on February 28, 2022, in an all-cash transaction valued at US$25.00 for each common share of First Horizon.
On February 9, 2023, both parties mutually agreed to extend the outside date to May 27, 2023, in accordance with the terms of the merger agreement. The closing of the transaction is subject to customary closing conditions, including approvals from U.S. and Canadian regulatory authorities, which now are not expected to be obtained prior to May 27, 2023. TD admitted that these approvals are beyond its control. If the merger does not close by May 27th, an amendment to the merger agreement would be required to further extend the outside date. Both sides are discussing a potential further extension.
Based on the estimated financial performance and balance sheets of the Bank and First Horizon, including transaction-related impacts, the Bank expects that its Common Equity Tier 1 capital ratio will be comfortably above 11 per cent upon the closing of the First Horizon acquisition.
TD is the sixth-largest bank in North America by assets. It serves more than 27 million customers in four key businesses operating in a number of locations in financial centres around the globe.
TD is also Canada’s second biggest lender, and reported a profit in Q1 2023 of $1.58 billion, down from $3.73 billion a year earlier. This is the latest news to come this week of a bank delivering declining profits in the quarter, following Royal Bank of Canada (TSX:RY) and the National Bank of Canada (TSX:NA) along with Bank of Montreal (TSX:BMO) and Scotiabank (TSX:NS) reporting their own drop in quarterly profits. Banks continue to fortify provisions in case of delays or defaults in loan repayments by borrowers struggling with high inflation.
Toronto Dominion Bank (TD) was down 2.68 per cent, trading at C$88.23 per share.