The Toronto-Dominion Bank (TSX:TD) signed a definitive agreement to acquire First Horizon Corporation (NYSE:FHN) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc. and others for $13.6 billion on February 27, 2022. The total consideration shall be paid in cash and TD Bank Group shall acquire all of the shares of First Horizon Corporation at $25 for each common share. First Horizon will be required to pay TD a termination payment of $435.5 million. TD has agreed to invest $494 million in non-voting First Horizon preferred stock to support First Horizon's growth and franchise enhancement, including employee retention programs. The merger consideration will be primarily funded with excess cash on TD's balance sheet. TD is committed to retaining client-facing bankers with no planned closures of First Horizon banking centers in connection with the transaction.

Following the closing of the transaction, Bryan Jordan will join TD as Vice Chair, TD Bank Group, reporting to Bharat Masrani and will join the TD Senior Executive Team. Bryan Jordan will also be named to the Boards of Directors of TD's U.S. banking entities as a director and Chair. Leo Salom, Group Head, U.S. Retail, TD Bank Group, and President and Chief Executive Officer, TD Bank, will lead the combined businesses. Once the transaction is completed, Memphis, First Horizon's current headquarters, will be an important regional hub for TD in the U.S. Southeast, supporting customers and operations and contributing to local communities and economies.

The transaction is subject to customary closing conditions, including approvals from First Horizon's shareholders, U.S. and Canadian regulatory authorities and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The First Horizon and TD board unanimously adopted and approved the merger agreement. If the transaction does not close prior to November 27, 2022, First Horizon shareholders will receive, at closing, an additional $0.65 per share on an annualized basis for the period from November 27, 2022 through the day immediately prior to the closing. The transaction will terminate, unless otherwise extended, if it does not close by February 27, 2023. As of May 31, 2022, the transaction was approved by Shareholders of First Horizon. The Center for Responsible Lending and 11 other progressive groups urged U.S. regulators to reject Toronto-Dominion Bank's proposed acquisition of First Horizon, arguing that the deal would harm low-income communities and reduce small business lending. In a letter to the Federal Reserve and the Office of the Comptroller of the Currency, the groups also cited the bank's overdraft-fee practices and made the case that large bank consolidation adds to systemic risk. Signatories of the letter, which was sent on August 23, 2022, include the Woodstock Institute, Demos, the California Reinvestment Coalition and the Americans for Financial Reform Education Fund, in addition to the Center for Responsible Lending. TD Bank Group and First Horizon Corporation have mutually agreed to extend the outside date of their proposed transaction from February 27 to May 27, 2023. The transaction is expected to close in the first quarter of TD's fiscal 2023. As of December 1, 2022, TD is planning to close the transaction in the first half of fiscal 2023, subject to customary closing conditions. As of January 10, 2023, Dominion's acquisition of First Horizon has been delayed and will likely be completed later this year. The transaction is expected to be immediately accretive at closing to TD's adjusted EPS and over 10% accretive to 2023E adjusted EPS on a fully-synergized basis. TD expects to incur total merger and integration costs of $1.3 billion primarily in the first two years following close. First Horizon intends to use the $150 million proceeds to fund retention incentives for the employees.

TD Securities and J.P. Morgan acted as financial advisors and Lee A. Meyerson, Ravi Purushotham, Adam J. Cohen, Spencer A. Sloan, Jeannine McSweeney, Joo Hyun Lee, Patricia K. Adams, Benjamin Rippeon, Lori E. Lesser, David W. Blass, Peter Guryan and Richard J. Jamgochian of Simpson Thacher & Bartlett LLP and Torys LLP acted as legal advisors to TD. Morgan Stanley & Co. LLC acted as financial advisor and fairness opinion provider and H. Rodgin Cohen, Mitchell S. Eitel, Stephen M. Salley, Marc R. Trevino and Davis J. Wang of Sullivan and Cromwell LLP acted as legal advisor to First Horizon Corporation (NYSE:FHN). Morrow Sodali LLC acted as the information agent to First Horizon for a fee of $17,500 for its services. Equiniti Trust Company acted as transfer agent to First Horizon. First Horizon has agreed to pay Morgan Stanley a fee of $82 million in the aggregate, $8 million of which was payable upon the rendering of its opinion and $74 million of which is contingent upon the consummation of the merger. Davis Polk & Wardwell, LLP acted as a legal advisor to Morgan Stanley & Co. LLC.

The Toronto-Dominion Bank (TSX:TD) cancelled the acquisition of First Horizon Corporation (NYSE:FHN) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc. and others on May 4, 2023. The merger agreement got cancelled as TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon. Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement. Under the terms of the termination agreement, the Bank made a $225 million cash payment to First Horizon on May 5, 2023.