Toronto-Dominion Bank agreed to buy Commerce Bancorp Inc for $8.5 billion, taking advantage of a soaring currency to double its size in the US.

Commerce Bancorp shareholders will get about $42 a share in cash and stock, Toronto-Dominion said in a statement on Tuesday. The offer values Commerce at 5.7 per cent more than Monday’s closing price.

The acquisition would be the biggest foreign purchase for the Toronto-based bank, adding 460 branches and $48 billion in assets in nine eastern states including New York and Pennsylvania. Former CEO Vernon Hill left Commerce two months ago, after an investigation by US regulators of the bank’s dealings with companies controlled by his family.

Canadian banks are using a stronger currency to expand abroad, making $16 billion in purchases this year to buy banks in the US, Latin America and the Caribbean.

The Canadian dollar reached parity with the US currency last month for the first time since 1976. Toronto-Dominion, which also owns Portland, Maine-based TD Banknorth, offered 0.4142 shares and $10.50 in cash for each Commerce Bancorp share. That’s $42.37 a share based on Toronto- Dominion’s closing share price on Monday, compared with Commerce’s price of $39.74.

Tax restructuring

The purchase adds to Banknorth’s 600 branches and $40 billion in assets in New England and other northeastern states.

The Canadian bank will take a pretax restructuring charge of $490 million once the purchase is complete, and Commerce will record costs of about $150 million in the third quarter after it sells some of its fixed-income securities.