San Francisco-based Charles Schwab has purchased Omaha-based TD Ameritrade in an all-stock transaction that will see the investment firms merge and have a new headquarters in the Dallas-Fort Worth area, Schwab officials announced early Monday morning.
The $26 billion stock purchase of the TD Ameritrade Holding Corporation by the Charles Schwab Corporation involves stockholders of the Omaha-based investment firm getting 1.0937 Schwab shares for each TD Ameritrade share they own, Schwab officials said.
The combined companies are expected to serve 24 million brokerage accounts with $5 trillion in assets.
Charles Schwab President and CEO Walt Bettinger said in a statement:
“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.”
“…With this transaction, we will capitalize 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.”
Schwab officials said the two firms recently generated $17 billion in total annualized revenue and $8 billion in pre-tax profits.
Both the Schawb and TD Ameritrade board of directors unanimously approved the sale.
The two firms are expected to merge over the next 18-36 months, with the new headquarters to be located in Westlake, Tx., a Dallas-Fort Worth suburb. Schwab officials tout the central location of the metro area relative to the rest of the country to allow it to be “hub” for a network of Schwab branches and operations centers.
Schwab officials reiterated that the company has a “longstanding commitment” to the Bay Area, and that although some roles may move from the city to Texas, the majority of San Francisco-based roles are not anticipated to be impacted by the sale.
Financial regulators and stockholders of both companies must approve the sale. Schwab officials expect the sale to close in the second half of 2020.