Charles Schwab Made A Bid To Buy TD Ameritrade For $26 Billion All-Stock Deal

Charles Schwab Corporation has agreed to buy TD Ameritrade Holding Corporation at $26 billion, a multibillion-dollar deal that will reshape the retail brokerage business. The equity value of the deal is $28.3 billion based on Schwab’s closing price of $48.20 on 22nd November.

Announcement of the deal comes after news of an acquisition broke on Thursday, sending up the shares of both firms. Schwab, America’s original discount broker, will now have even more sway over the sector pioneered nearly a half-century ago.

According to a statement on Monday, the combined firm will relocate its headquarters to to Schwab’s new campus in Westlake, Texas,  however, Schwab’s San Francisco operations will remain a sizable hub.

According to Bloomberg, TD Bank, which holds 43% of TD Ameritrade, will own roughly 13% of the new business. Its voting stake will be limited to 9.9%, with the rest of its position in a non-voting class of stock. The Canadian lender will have two new seats on the combined firm’s board, while TD Ameritrade will name a single director.

Walt Bettinger, Schwab’s chief executive officer, said in the statement that the new firm will have “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.”

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Credit: Bloomberg