Charles Schwab to buy TD Ameritrade in $26bn deal
US brokerage firm Charles Schwab has agreed to buy rival TD Ameritrade in an all-share deal valued at around $26bn.
Charles Schwab Corp.
$74.99
11:04 26/04/24
TD Ameritrade Holding Corp.
n/a
07:46 20/03/24
Under the terms of the agreement, Ameritrade shareholders will receive 1.0837 Schwab shares for each of their shares.
Schwab president and chief executive officer Walt Bettinger said: "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 advisors. Together, we share a passion for breaking down barriers for investors and advisors through a combination of low cost, great service and technology.
"With this transaction, we will capitalise 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."
The deal, which has been unanimously approved by the boards of directors of both companies, is expected to be 10-15% accretive to GAAP earnings per share and 15-20% accretive to operating cash EPS in year three after completion, Schwab said.
Current estimates are for approximately $1.8bn to $2bn run-rate expense synergies, which represents approximately 18-20% of the combined cost base.
At 1110 GMT, Schwab shares were down 0.4% in pre-market trade at $47.99 and Ameritrade was up 2.4% at $49.26.