Charles Schwab confirms $26B TD Ameritrade deal
Charles Schwab Corp. confirmed on Monday reports from last week of its plans to buy TD Ameritrade for $26 billion, with the companies planning to establish a new headquarters campus outside Fort Worth, Texas.
San Franciscobased Schwab will jettison the TD Ameritrade name, with the Omaha, Neb.based company formed from the 2006 merger of TD Waterhouse and Ameritrade. Schwab and TD Ameritrade expect a full integration of their account bases and platforms to take anywhere from 18 months to three years after the deal is completed.
TD Ameritrade announced it is suspending a previously announced search for a new CEO to replace Tim Hockey, with Charles Schwab CEO Walt Bettinger to lead the combined company if the deal is approved by regulators. The companies anticipate they will not complete the deal before next summer, with TD Ameritrade elevating its chief financial officer as interim CEO.
TD Ameritrade confirmed it expects job cuts as a result of the combination, vowing any employees impacted “will be treated fairly and with the utmost dignity and respect,” in its words. Between them, Schwab and TD Ameritrade employ nearly 30,000 people, with both having offices in Fairfield, Stamford and West Hartford and additional, separate locations as well in Greenwich, Ridgefield, Brookfield,
Madison, Manchester and Waterford.
“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 advisers,” Bettinger was quoted saying in a Monday press release. “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.”
Both companies created their respective stock brokerage services in May 1975 to capitalize on the Securities & Exchange Commission’s deregulating the pricing of commissions on trades. Today, Schwab and TD Ameritrade client assets total more than $5 trillion across 24 million accounts that are funded, with the companies generating $17 billion in revenue over 12 months through this past September.
Fidelity listed $7.8 trillion in customer assets as of September, with the far smaller E*Trade rounding out an industry “big four” that now offer commissionfree trades for many transactions.
TD Ameritrade is two years removed from the $4 billion acquisition of Scottrade that added three million accounts, while Schwab is in the process of absorbing brokerage accounts of USAA, which provides financial services to members of the U.S. military and veterans.
TD Bank’s existing 43 percent stake in TD Ameritrade would be whittled to a 13 percent stake in Schwab at the deal’s conclusion.