Toronto-Dominion Bank (NYSE:TD) (TSE:TD) has abandoned its $13.4 billion acquisition of First Horizon Corp (NYSE:FHN) due to unresolved regulatory approval issues, causing First Horizon’s shares to plummet more than 36% at the time of writing. The two banks mutually agreed to terminate the deal, with TD paying First Horizon $200 million and an additional $25 million fee reimbursement.
First Horizon’s spokesperson stated that the termination was solely due to TD’s inability to secure approvals, not the ongoing banking crisis. First Horizon CEO Bryan Jordan revealed that TD could not provide an updated timeline for approval or assurance of regulatory clearance in the coming years.
The canceled deal leaves TD’s U.S. strategy uncertain, as some shareholders worry about the bank’s ability to invest in the U.S. market due to potential regulatory challenges. The collapse of the deal has also further shaken confidence in U.S. regional banks, with three banks collapsing since February due to uncontrolled deposit flights.
Although FHN stock cratered today, it appears that TD investors were happy with the news, as TD stock is fractionally higher so far in today’s trading. Nevertheless, both stocks are currently rated as Moderate Buys according to Wall Street, although analysts might change their opinions following today’s developments.
