Canada-based Toronto Dominion Bank (TD) and the US-based First Horizon have mutually agreed to terminate their previously announced $13.4bn merger deal signed in February last year.
Both parties mutually agreed to terminate the merger agreement, due to an uncertainty related to obtaining the regulatory approvals to complete the transaction.
Under the terms of the termination agreement, TD will make a $200m cash payment, in addition to a $25m fee reimbursement to First Horizon.
The shares of First Horizon’s series G preferred stock, purchased by TD Bank, will continue to have a conversion price of $25 per share.
Neither of the parties is required to pay any additional fees or assume any further liabilities to the other, as a result of the merger agreement.
First Horizon chairman, president and CEO Bryan Jordan said: “While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability.
“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 and remain focused on executing our client-centric growth plan.
“We continue to develop and expand deep client relationships across all of our markets, which include some of the fastest-growing US markets, while maintaining a strong, asset-sensitive balance sheet well-positioned for the current rate environment.”
The merger had faced months of regulatory uncertainty, and the TD bank was brought under pressure by some investors to terminate the deal, after the US regional banking crisis, reported Reuters.
TD Bank Group president and chief executive officer Bharat Masrani said: “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.
“I want to thank First Horizon for their partnership over the last several months and wish them enormous success in the future.
“Above all, I want to thank our colleagues at TD Bank, America’s Most Convenient Bank, for their tremendous efforts and steadfast dedication to the Bank, the millions we serve and the communities in which we live and work.”
In August last year, TD Bank signed a definitive agreement to acquire US-based investment banking company Cowen in an all-cash transaction worth $1.3bn.
