Charles Schwab, TD Ameritrade sign $26bn merger deal

Charles Schwab acquisition of TD Ameritrade: Charles Schwab, a California-based bank and stock brokerage firm, has signed an all-stock deal valued at around $26 billion to acquire TD Ameritrade, a securities brokerage services provider based in Nebraska.

TD Ameritrade offers investing services to nearly 12 million client accounts totaling around $1.3 trillion in assets, and custodial services to 7,000 plus registered investment advisors. Claimed to be a leading player in the US retail trading sector, TD Ameritrade executes an average of around 800,000 trades per day, of which more than 25% is said to come from mobile devices.

Charles Schwab has over 365 offices and 12.1 million active brokerage accounts to go along with 1.4 million banking accounts, 1.7 million corporate retirement plan participants. The financial services company holds $3.77 trillion in client assets as of 30 September 2019.

Via its operating subsidiaries, Charles Schwab caters to individual investors and independent investment advisors with a range of wealth management, banking, asset management, securities brokerage, custody, and financial advisory services.

Charles Schwab acquisition of TD Ameritrade. Photo courtesy of Tony Webster from Minneapolis, Minnesota, United States/Wikipedia.org.

As per the terms of the deal, TD Ameritrade shareholders will exchange each of their shares for 1.0837 Schwab shares.

Walt Bettinger – Charles Schwab President and CEO Walt Bettinger, commenting on Charles Schwab acquisition of TD Ameritrade, said: “We have long respected TD Ameritrade since our early days pioneering the discount brokerage industry, and as a fellow advocate for investors and independent investment advisors. Together, we share a passion for breaking down barriers for investors and advisors through a combination of low cost, great service and technology.

“With this transaction, we will capitalize on the unique opportunity to build a firm with the soul of a challenger and the resources of a large financial services institution that will be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.”

Upon completion of the merger, The Toronto-Dominion Bank (TD Bank), which currently has nearly 43% stake in TD Ameritrade will have an estimated ownership position of around 13% in the combined company, while other TD Ameritrade stockholders will own nearly 18% stake. The remaining 69% stake in the enlarged company will be held by existing stockholders of Charles Schwab.

Commenting on Charles Schwab acquisition of TD Ameritrade, Stephen Boyle – interim President and CEO of TD Ameritrade, said: “We share a common history—a journey since 1975 that has made Wall Street more accessible and financial dreams more attainable for millions of Americans. Our associates are fiercely proud of that legacy and all that we have accomplished to make TD Ameritrade one of the premier firms in financial services.

“Now we look to join forces with a respected firm like Schwab that shares our relentless focus, and to do more than we could do apart. Together, we can deliver the ultimate client experience for retail investors and independent registered investment advisors.”

Charles Schwab acquisition of TD Ameritrade is expected to be wrapped up in Q2 2020 should it meet customary closing conditions such as securing applicable regulatory approvals, approval by the stockholders of the two companies, and others.