Charles Schwab has agreed to acquire TD Ameritrade, the companies announced Monday.
In the $26 billion all-stock deal, Ameritrade shareholders will receive 1.0837 Schwab shares for every share held, which thereby implies a 17% premium over the stock’s 30-day average price before news of the deal broke.
The merger between the two online brokerage companies would potentially lead to a combined 24 million customer accounts and more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25 billion. Schwab’s existing shareholders will own 69% of the combined entity, and TD Ameritrade’s present stockholders will own 18%.
The merger news comes close on the heels of announcements that both companies are planning to eliminate commissions for most of their respective online trades (as is being pursued by several online brokerages in the recent past).
The Schwab-Ameritrade deal is expected to close in the second half of 2020 – subject to regulatory approvals.