TD has received all of the regulatory approvals it needed to complete its $1.3 billion acquisition of Wall Street brokerage Cowen, the Canadian bank said Friday in a statement.
The deal is expected to close Wednesday.
The all-cash transaction, announced in August, is set to bring 1,700 Cowen employees to TD Securities. Cowen CEO Jeffrey Solomon will join TD Securities’ senior leadership, reporting to Riaz Ahmed, the bank’s chief of wholesale banking. Parts of the combined business will be known as TD Cowen, a division of TD Securities, led by Solomon, TD said in August.
“Taking this step will make us even stronger and more effective in serving [our clients’] growing needs,” Solomon said. “The strategic decisions and focused investments that we have made over the last few years have positioned Cowen for this exciting new chapter of our growth.”
Cowen, however, reported an 82% drop in net income in its fourth-quarter earnings, according to Reuters.
Much of the attention surrounding TD’s acquisition prospects has centered on the bank’s $13.4 billion tie-up with First Horizon, proposed a year ago this week. While that deal has seen pushback from community advocates and a prominent U.S. senator — and the transaction’s timeline has been pushed back to May — the Cowen acquisition has plugged along on schedule.
TD reports its quarterly earnings Thursday, and will at least have the Cowen deal to trumpet. In announcing its intention to buy the brokerage, TD CEO Bharat Masrani called Cowen a “leading independent dealer with a premier U.S. equities business and a strong, diversified investment bank that, when combined with TD Securities, will allow us to accelerate our strategic U.S. growth plans.”
Masrani, in 2021 told Bloomberg that TD is “very open” to major mergers and acquisitions in the U.S. market, and the bank reportedly lost out to BMO in the sweepstakes to pick up Bank of the West from BNP Paribas.
Buying Cowen “will provide new capabilities and increased depth in key business lines to meet our clients’ needs and will allow us to leverage our combined expertise, talent and integrated offerings across a much larger client base,” Masrani said in August.
TD sold 28.4 million nonvoting common shares of another brokerage, Charles Schwab, for roughly $1.9 billion to provide capital for the Cowen purchase.
As for the First Horizon deal, Masrani last month said he was awaiting regulatory approval from U.S. agencies.
“That is an unknown,” he told a conference, according to The Globe and Mail. “The latest deals seem to take longer than [they] used to.”
TD unveiled a five-year, $50 billion community benefits plan this month in an effort to persuade regulators — and community advocates — to give their blessing on the bank’s strategy for expansion across the Southeast U.S. As part of the plan, TD pledged to open at least 25 new branches and 25 ATMs in low- to moderate-income or majority-nonwhite markets over the next five years. It also vowed to increase residential mortgage loans by 65% — to $21 billion — for LMI and nonwhite borrowers, including in LMI and majority-nonwhite census tracts.
