TD will pay USD 25 for each First Horizon share, a 37% premium to the target's last close, funding the deal entirely with its excess capital.
The deal will make TD the sixth-largest US bank, with about USD 614 billion in assets, operating in 22 states. TD's core capital level after the deal will remain above the minimum set by the regulator. It had about USD 16.9 billion of excess capital as of October 31, 2021.
TD's acquisition will yield pretax cost savings of USD 610 million, as well as additional revenue synergies. TD, which expects merger and integration costs of USD 1.3 billion, has no plans to close any branches or to scale down any of First Horizon's existing businesses.
Should the deal not close before November 27, 2022, First Horizon shareholders will receive another 65 cents per share on an annualised basis until the closing date.
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