Discount broker Charles Schwab has closed its planned takeover of smaller rival TD Ameritrade, creating an entity with around $6trn in client assets.
The $26bn deal was announced in November last year and received the antitrust approval from the US Department of Justice (DOJ) this June.
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Transaction details
The merged group will have 28 million brokerage accounts.
Under the agreement, TD Ameritrade stockholders will get 1.0837 shares of Schwab common stock for each share held.
Schwab intends to combine TD Ameritrade’s thinkorswim and thinkpipes trading platforms, educational resources and tools into its trader suite serving retail and independent adviser clients.
It will also retain iRebal – the customisable portfolio rebalancing solution of TD Ameritrade Institutional – to serve independent adviser clients.
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By GlobalDataThe consolidated entity will offer wealth management platforms, RIA custody platforms, banking and asset management, and retirement services, among others.
At the same time, Schwab will move its corporate headquarters from San Francisco to its new campus in Westlake, Texas next January.
Schwab president and CEO Walt Bettinger said: “Looking forward, we intend to quickly and efficiently harness our complementary strengths in order to break down even more barriers for investors.
“In doing so, we intend to deliver a winning combination of low costs, great service and industry-leading technology to support our clients, and the advisers who serve them, across every phase of their financial journey.”
The integration process will be done in the next 18 to 36 months, until which the two businesses will operate separately.
Todd Ricketts on behalf of TD Ameritrade, along with Brian Levitt and Bharat Masrani representing TD Bank were elected to the Schwab board as part of the deal.
The deal comes amid an era of zero commissions in the US brokerage industry.
Another big deal in the industry in recent times is Morgan Stanley’s acquisition of discount brokerage E*TRADE Financial for $13bn.
