Canada’s Toronto-Dominion Bank Group canceled its $13.4 billion acquisition of First Horizon Corp. on Thursday, sending shares in the U.S. regional bank tumbling.
In a joint statement, TD Bank and First Horizon said it was mutually agreed to end the planned merger, which was announced in February 2022. The companies said TD was unable to clarify a timeline for regulatory approval, “for reasons unrelated to First Horizon.”
According to the terms of the breakup, TD will pay $200 million in cash to First Horizon, along with a $25 million fee reimbursement.
The deal’s collapse was said to be entirely due to regulatory issues, but three regional banks in the U.S. have collapsed since February, beginning with Silicon Valley Bank.
“We’ve only just begun to see the fallout for banks in the U.S. as a result of pandemic-related policy decisions,” said business strategist JB Brown.
“Between the devaluation of the dollar and some poor financial management by the bank executives coming home to roost… it’s going to get ugly,” Brown said. “Interestingly, I believe there is a great play in acquiring small regional banks which tend to be more conservative.”
“This decision provides our colleagues and shareholders with clarity. Though disappointed with the outcome, we move forward with a strong, growing franchise in the United States, servicing more than 10 million customers across our footprint,” said Bharat Masrani, Group President and CEO, TD Bank Group.
“First Horizon will continue on its growth path operating from a position of strength and stability,” said First Horizon Chairman, President and CEO Bryan Jordan. “Our strong capital position, disciplined credit quality, expense control measures, and well-diversified and stable funding mix have enabled our business to navigate challenging banking industry dynamics.”
TMX contributed to this story.
