The TD bank logo is seen on top of the Toronto Dominion Canada Trust Tower in Toronto, Ontario, Canada March 16, 2017. Picture taken March 16, 2017. REUTERS/Chris Helgren/File PhotoRegister now for FREE unlimited access to Reuters.comAug 2 (Reuters) - Canada's Toronto Dominion Bank (TD.TO) said it will buy New York-based boutique investment bank Cowen Inc (COWN.O) for $1.3 billion in cash, seeking to boost its presence in the high-growth U.S market.The deal marks TD's second acquisition bid in the United States this year and the Canada's second-largest lender by market value has made no secret of its ambitions to expand in the world's biggest economy. TD will fund the acquisition from the $1.9 billion proceeds from the sale of shares of Charles Schwab , announced on Monday.Canada's major banks have been on a shopping spree south of the border in the past year, seeking growth away from home, where the Big Six banks control nearly 90% of the market. read more Register now for FREE unlimited access to Reuters.comNational Bank Financial analysts said the deal provides "valuable diversification" of TD's U.S. capital markets business, but flagged integration as a primary risk, saying it is "notoriously difficult when involving investment banking operations with different cultures."In February, TD said it would buy Memphis-based First Horizon Corp (FHN.N) for $13.4 billion in its biggest ever acquisition. read more Investors had already expressed concern around integration following the First Horizon deal. read more The Cowen deal values the target at $39 a share, a nearly 10% premium to its last closing price. Cowen shares rose 8.9% in morning trading in New York. TD shares slipped 1.3%.The transaction is "modestly positive (for TD), especially given that it is on-strategy with the bank’s push into its U.S.-dollar platform," Credit Suisse Analyst Joo Ho Kim wrote in a note.On Monday, TD said it was selling 28.4 million shares of Schwab, reducing its ownership to about 12% from 13.4%. That stake was the result of Schwab's purchase of TD Ameritrade, of which TD owned 43%. TD said it has no current plans to sell more Schwab shares.TD expects pre-tax integration costs of about $450 million over three years, and revenue synergies of $300-350 million by the third year.TD must pay a termination fee of $42.25 million if it cancels the deal because of a recommendation change or another superior proposal.The deal is expected to close in the first quarter of 2023.Register now for FREE unlimited access to Reuters.comReporting by Nichola Saminather in Toronto and Manya Saini in Bengaluru; Editing by Aditya Soni and Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.
Canada's TD Bank eyes further U.S. expansion with $1.3 bln Cowen purchase.