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.
What that means for E-Trade and Charles Schwab"On the heels of all the zero-commission announcements, this was the inevitable next shoe to drop," said Bill Capuzzi, CEO of Apex Clearing, a custodian firm that holds securities for brokerages. Capuzzi said the merger makes"a lot of sense," because the overlap in their respective businesses could save the combined company a huge amount of money.
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