CNN, New York :
Two of the leaders of the online brokerage industry are merging. Charles Schwab agreed to buy TD Ameritrade for $26 billion, the companies announced Monday.
“We have long respected TD Ameritrade,” said Schwab CEO Walt Bettinger, in a statement. “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.”
The combined company would be a brokerage behemoth. It will have 24 million customer accounts with more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25 billion.
The deal comes a month after both companies announced plans to eliminate commissions for most online trades – a move that is great for their customers but left analysts and investors in these stocks wondering how Schwab and TD Ameritrade would make up for the loss in revenue.
Schwab said it would go to zero just a few days after smaller rival Interactive Brokers Group (IBKR) said it was ending commissions. But the decision by Schwab launched an immediate price war, with TD Ameritrade (AMTD).
Two of the leaders of the online brokerage industry are merging. Charles Schwab agreed to buy TD Ameritrade for $26 billion, the companies announced Monday.
“We have long respected TD Ameritrade,” said Schwab CEO Walt Bettinger, in a statement. “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.”
The combined company would be a brokerage behemoth. It will have 24 million customer accounts with more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25 billion.
The deal comes a month after both companies announced plans to eliminate commissions for most online trades – a move that is great for their customers but left analysts and investors in these stocks wondering how Schwab and TD Ameritrade would make up for the loss in revenue.
Schwab said it would go to zero just a few days after smaller rival Interactive Brokers Group (IBKR) said it was ending commissions. But the decision by Schwab launched an immediate price war, with TD Ameritrade (AMTD).
