TD Bank’s Acquisition of Cowen Receives Regulatory Approval


Last week, Canada’s second largest bank, TD Bank (NYSE: TD) received all the required regulatory approvals to complete its proposed merger with New York-based investment bank, Cowen Group (NASDAQ: COWN) in an all-cash transaction valued at $1.3 bln or $39 per share.

Details on the Deal

TD Bank and Cowen recently announced that they have received all the regulatory approvals necessary to complete TD Bank’s agreed upon acquisition of Cowen.  As a result, TD expects this acquisition will close on March 1, 2023.

In August 2022, TD Bank had agreed to purchase Cowen in an all-cash deal worth $1.3 bln or $39 per share of Cowen’s common stock, representing 1.7 times current book value as of Q1 2022.  The acquisition will see Cowen integrated into TD Securities, the group’s investment banking arm.  The new division will be called TD Cowen and will be headed up by Cowen chairman and CEO Jeffrey Solomon.  Solomon will report to TD Securities president and CEO Riaz Ahmed.  Cowen’s 1,700 employees will bring the combined entity up to a total staffing level of 6,500 across 40 cities.

The deal is expected to boost the TD Bank’s combined revenues by more than a third, to an estimated C$6.8 billion, as well as adding advisory, capital markets, equity execution and a top 10 equity research franchise to TD’s suite of services.

Bharat Masrani, group president and CEO of TD Bank Group explained the strategic rationale for this acquisition, saying “Cowen is a leading independent dealer with a premier US equities business and a strong, diversified investment bank that, when combined with TD Securities, will allow us to accelerate our strategic US growth plans.  Most importantly, the acquisition 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.”

Our Take

TD Bank’s acquisition of Cowen is clearly part of the bank’s greater strategy to compete more directly with Canada’s largest bank, RBC.  As a result of the purchase, TD Bank will add new capabilities in U.S. equities, including a strong sales, trading and execution platform, as well as a renowned global research platform.

The deal seems to make a lot of sense for TD, who is trying to expand its operations into the US in a heavily regulated and competitive industry like investment banking.  However, this deal is only a part of TD Bank’s expansion plans as last year the bank entered into a definitive agreement to buy Tennessee-based First Horizon Bank for $13.4 billion in a bid to break into the top six US retail banks.  The First Horizon deal has been delayed and is now expected to close in late May.

The one question we have about the merger is whether it will alter Cowen’s innovative culture?  Over the past few years Cowen continued to expand its global equity research franchise; it built out an alternative data business; and, more recently it has started building a division to offer a suite of crypto services to institutional investors.  It will be interesting to see whether TD Cowen will continue its innovative ways once the merger has closed.


About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email:

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