TD and First Horizon agreed to extend until May 27 the date by which their proposed $13.4 billion tie-up must close, the banks said Thursday.
The agreement puts on paper a timeline TD had acknowledged as early as December, when executives said the bank aimed to complete the transaction in the first half of fiscal 2023 — meaning, by April 30.
“TD and First Horizon are fully committed to the merger and continue to make significant progress in planning for the closing and the integration of the companies,” the banks said in a statement Thursday, adding that “progress is being made on a Community Benefits Plan.”
Such plans have been crucial in gaining the support of local community advocates, who frequently warn of the negative impact of acquisitions on low- to moderate-income (LMI) communities.
TD, for one, pledged in September, to expand in Charlotte, North Carolina, with 15 new branches. At least 25% of those locations are slated to be in majority-nonwhite or LMI areas.
In part to appease advocates and regulators, U.S. Bank, for example, laid out a five-year, $100 billion community benefits plan before its $8 billion acquisition of MUFG Union Bank received final approval in October. Bank of Montreal, meanwhile, floated a $40 billion community benefits plan attached to its acquisition of Bank of the West, which received a green light last month.
TD CEO Bharat Masrani expressed uncertainty last month as to the timeline by which the deal may be accepted.
“The final one is the regulatory approvals by the major agencies in the U.S.,” Masrani said, according to The Globe and Mail. “That is an unknown. The latest deals seem to take longer than it used to.”
That may have been apparent from the deal’s initial structure. TD put a time-based incentive on its initial price tag for First Horizon. The Canadian bank agreed to pay $0.65 more per share if the deal, initially proposed in February 2022, was not completed before Nov. 27 of that year.