The deal was valued at $13.4 billion when it was announced in February 2022, but banks cite regulatory uncertainty for its demise
First Horizon Corp. and TD Bank Group have mutually agreed to end their merger agreement, which was valued at $13.4 billion when it was first announced more than a year ago, the companies announced Thursday morning.
First Horizon shares (FHN) were plummeting 45% in premarket trading after the announcement. Prior to the announcement, First Horizon stock had been trading well below the $25-per-share deal price, a sign that investors were skeptical that the deal would go through.
“TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon,” the companies said in a release. “Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement.”
TD (TD.T) is planning to make a $200 million cash payment to First Horizon in accordance with its termination agreement. That’s in addition to a $25 million fee reimbursement related to the merger agreement.
“While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability,” First Horizon Chief Executive Bryan Jordan said in a release.
TD Bank Chief Executive Bharat Masrani said that the announcement “provides our colleagues and shareholders with clarity” and that TD Bank would “move forward with a strong, growing franchise in the United States” though he was “disappointed” with the resolution.
The $13.4 billion planned deal was originally announced in February 2022, but questions had been raised over whether the deal would close.