CHERRY HILL, NJ-With 460 branches and $47 billion in assets, Commerce Bancorp is New Jersey's largest home-based bank. Now, it's going to become part of Toronto-based TD Bank's growing financial empire. The two companies have signed a definitive agreement for the latter to acquire the former in a 75% stock and 25% cash deal valued at $8.5 billion.
“Acquiring Commerce Bank offers a unique and compelling opportunity for our shareholders,” says TD Bank president and CEO Ed Clark in a statement. “The combination of Commerce and TD Banknorth doubles the scale of our US banking business and accelerates our transformation to a leading…financial institution.”
“Our joining forces with TD Bank…opens the door to tremendous new growth opportunities,” says Dennis DiFlorio, Commerce's chairman, in a statement.
Commerce Bank was founded with a single branch in 1973 by Vernon Hill, and still had just 18 branches in 1988. With unusual hours, décor and services, Hill brought a retail aura to the banking world–the company internally commonly refers to its branches as “stores.” Hill departed Commerce earlier this year after federal regulators forced the company to stop doing business with companies controlled by members of his family.
The takeover by TD, pending approval by shareholders and US and Canadian bank regulators, is expected to close in the spring. Under the agreement, Commerce shareholders will get 0.41 shares of a TD common share and $10.50 in cash in exchange for each common share of Commerce Bancorp. The consideration was negotiated on the basis of $42.00 per share value for Commerce Bank, based on the Oct. 1 closing price of TD common shares of $42.37.
Once the deal closes, TD expects to take a one-time restructuring charge of $490 million pre-tax. Also as part of the deal, Commerce has agreed to sell its Commerce Banc Insurance Services Inc. Finally, DiFlorio as chairman and Bob Falese as president and CEO will remain in those positions to run Commerce, based at its current headquarters here.
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