The First Horizon, TD Bank merger is off. Here's what we know about the breakup

Corinne S Kennedy, Memphis Commercial Appeal
·2 min read
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The First Horizon building is shown in Downtown Memphis on Feb. 28, 2022. A proposed acquisition by Canadian lender Toronto-Dominion Bank Group fell apart this week.
The First Horizon building is shown in Downtown Memphis on Feb. 28, 2022. A proposed acquisition by Canadian lender Toronto-Dominion Bank Group fell apart this week.

The planned $13.4 billion merger between Memphis-based First Horizon Bank and Toronto-based TD Bank Group is off. The two financial institutions confirmed the deal breakup Thursday morning.

"While today's announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability," Bryan Jordan, First Horizon chairman, president and chief executive officer, said in a statement.

The merger, publicly announced in February 2022, had hit several snags in recent months, forcing the extension of a potential closing date and prompting questions about if the merger would fall apart.

Here’s what you need to know.

First Horizon's future: What's next for First Horizon after $13.4 billion TD Bank merger collapses?

Why did the TD Bank-First Horizon merger get called off?

Lingering uncertainty appears to be the culprit. Questions about the timeline for the merger have persisted for months.

TD had told First Horizon it did not have a timetable for necessary regulatory approvals. That uncertainty about if and when those approvals can be obtained led to the termination of the merger agreement, the groups said.

The First Horizon building Downtown Memphis, Tenn. Monday, Feb. 28, 2022. Canadian lender Toronto-Dominion Bank Group is set to buy the Tennessee headquartered operations of First Horizon Corporation.
The First Horizon building Downtown Memphis, Tenn. Monday, Feb. 28, 2022. Canadian lender Toronto-Dominion Bank Group is set to buy the Tennessee headquartered operations of First Horizon Corporation.

Who called off the TD Bank-First Horizon merger?

According to the institutions, the decision to call off the merger was mutual.

What are the financial terms?

According to a news release, TD will make a $200 million cash payment to First Horizon as part of the termination agreement.

TD will also make a $25 million fee reimbursement payment to First Horizon, pursuant to the original merger agreement.

Bryan Jordan, president and CEO of First Horizon, speaks about the proposed merger with TD Bank during a luncheon on Aug. 1, 2022, at the Holiday Inn University of Memphis. The proposed deal has fallen apart.
Bryan Jordan, president and CEO of First Horizon, speaks about the proposed merger with TD Bank during a luncheon on Aug. 1, 2022, at the Holiday Inn University of Memphis. The proposed deal has fallen apart.

What is the impact on First Horizon and TD Bank stock prices?

First Horizon share prices plummeted in the immediate aftermath of the announcement.

Stock prices dropped more than 40% in pre-market trading, and at one point Thursday morning dropped to 8.99 a share, a 52-week low. Shares had long been trading well below the $25-per-share deal price put forward in the merger agreement.

TD saw a slight drop in share prices when the markets opened Thursday. About an hour after opening, stock prices were at $59.60, down from $60.75 at the open. That remains several points above the 52-week low of $55.43.

This story will be updated.

Corinne S Kennedy covers economic development, real estate and healthcare for The Commercial Appeal. She can be reached via email at Corinne.Kennedy@CommercialAppeal.com

This article originally appeared on Memphis Commercial Appeal: TD Bank, First Horizon merger is off: Here's what we know