Charles Schwab confirms plans to buy Omaha-based TD Ameritrade in $26 billion deal


Charles Schwab confirms plans to buy Omaha-based TD Ameritrade in $26 billion deal

Charles Schwab is buying rival TD Ameritrade for $26 billion, a blockbuster deal accelerated by massive disruption in the online brokerage industry. Competitive pressure has already forced brokerages to make it free for customers to trade U.S. stocks online, and Schwab’s proposal would combine two of the biggest players in the industry.The tie-up announced Monday would create a company so big, however, that it may draw sharp scrutiny from antitrust regulators, analysts say. Together the companies would have more than $5 trillion in client assets.By itself, Schwab may control close to half the market for acting as a custodian for money managed by registered investment advisers, for example, while TD Ameritrade may control about 15% to 20%, according to Kyle Voigt, an analyst with Keefe, Bruyette & Woods.In a release posted on its website, Charles Schwab said it expects the transition to close in the second half of 2020. It would begin integration efforts shortly after that. That is expected to take between 18 and 36 months.Charles Schwab also said job cuts are expected. It will eliminate roles that overlap and duplicate positions. It did not release specifics about those cuts, saying it wouldn’t have that information until the integration process.In a statement Monday, Nebraska Governor Pete Ricketts, a former COO of Ameritrade, said “Today’s announcement by TD Ameritrade creates significant uncertainty for the thousands of Nebraskans who have loyally worked for the company through the years. As Governor and the former COO of Ameritrade, I am anxious to see what their decision means for the people of Nebraska.”Ricketts continued: “In the coming days, I will work to personally make the case to Schwab to stay committed to Omaha. Our cost of doing business is incredibly competitive and our people are the most hardworking in the nation. We can help Schwab be successful and take their business to the next level as they compete nationally and internationally.”Once combined, Charles Schwab said it will relocate both companies to Schwab’s new campus in Westlake, Texas. Currently, TD Ameritrade is based out of Omaha, Neb.To view the full release from the Charles Schwab website, click here.To view the full release from TD Ameritrade, click here.

Charles Schwab is buying rival TD Ameritrade for $26 billion, a blockbuster deal accelerated by massive disruption in the online brokerage industry.

Competitive pressure has already forced brokerages to make it free for customers to trade U.S. stocks online, and Schwab’s proposal would combine two of the biggest players in the industry.

The tie-up announced Monday would create a company so big, however, that it may draw sharp scrutiny from antitrust regulators, analysts say. Together the companies would have more than $5 trillion in client assets.

By itself, Schwab may control close to half the market for acting as a custodian for money managed by registered investment advisers, for example, while TD Ameritrade may control about 15% to 20%, according to Kyle Voigt, an analyst with Keefe, Bruyette & Woods.

In a release posted on its website, Charles Schwab said it expects the transition to close in the second half of 2020. It would begin integration efforts shortly after that. That is expected to take between 18 and 36 months.

Charles Schwab also said job cuts are expected. It will eliminate roles that overlap and duplicate positions. It did not release specifics about those cuts, saying it wouldn’t have that information until the integration process.

In a statement Monday, Nebraska Governor Pete Ricketts, a former COO of Ameritrade, said “Today’s announcement by TD Ameritrade creates significant uncertainty for the thousands of Nebraskans who have loyally worked for the company through the years. As Governor and the former COO of Ameritrade, I am anxious to see what their decision means for the people of Nebraska.”

Ricketts continued: “In the coming days, I will work to personally make the case to Schwab to stay committed to Omaha. Our cost of doing business is incredibly competitive and our people are the most hardworking in the nation. We can help Schwab be successful and take their business to the next level as they compete nationally and internationally.”

Once combined, Charles Schwab said it will relocate both companies to Schwab’s new campus in Westlake, Texas. Currently, TD Ameritrade is based out of Omaha, Neb.

To view the full release from the Charles Schwab website, click here.

To view the full release from TD Ameritrade, click here.


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