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June 5, 2020

Charles Schwab acquisition of TD Ameritrade obtains DOJ and shareholder nod

Discount broker Charles Schwab has secured the antitrust approval from the US Department of Justice (DOJ) for its purchase of smaller rival TD Ameritrade.

The all-stock deal worth around $26bn was announced in November last year.

The combination of the two businesses is said to create a brokerage giant with more than $5trn in assets.

Under the agreement, TD Ameritrade stockholders will receive 1.0837 Schwab shares for each share held.

Shareholders of both companies have cleared the merger. The deal now awaits Schwab regulatory approvals.

Completion of the deal is anticipated in the second half of 2020, with the integration slated to occur 18-36 months post completion.

Schwab president and CEO Walt Bettinger said, “The combination will generate substantial long-term value for Schwab’s stockholders and bring together two leading firms with proud and similar histories of making investing more accessible to all.

“Together, with a focus on low cost, great service and technology, we will form a company that is uniquely positioned to serve the investment, trading and wealth management needs of investors—and the advisors who serve them—in every phase of their financial journey.”

The consolidation comes amid a stiff price war in the brokerage industry, with major brokers lowering trading commissions to zero.

The industry witnessed various other big deals in recent times.

Last month, Goldman Sachs agreed to buy Folio Financial, a brokerage, custodian, and financial technology company.

Earlier this year, Morgan Stanley entered into an agreement to acquire online trading platform E*TRADE Financial for $13bn.

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