Charles Schwab and TD Ameritrade Merger Gets Closer
The merger between Charles Schwab and TD Ameritrade, two discount brokers, will have about $5 trillion in client assets. The deal will likely close by the end of 2020.
Sep. 28 2020, Updated 1:36 p.m. ET
In June 2020, the merger deal between Charles Schwab and TD Ameritrade was approved by the Department of Justice’s antitrust division. The merger deal was announced in November 2019 shortly after Schwab cut the trading commission to zero. The move triggered a price war and prompted other major online brokerage firms to quickly follow suit.
The Schwab and TD Ameritrade merger deal will create a brokerage mammoth with about $5 trillion in client assets — $1.3 trillion from TD Ameritrade and $3.8 trillion from Schwab. The combined company will likely serve about 24 million clients.
Schwab and TD Ameritrade merger timeline
Charles Schwab is acquiring TD Ameritrade in a $26 billion all-stock deal. Under the terms of the agreement, TD Ameritrade shareholders will receive 1.0837 Schwab shares for each share held. For more information on the deal, check out the following timeline.
- On September 26, 2019, Interactive Brokers said that it would allow investors to trade in stocks and ETFs without commission fees. Interactive Brokers followed the earlier steps by online brokerages like Robinhood. The announcement pressured shares of retail brokerage firms like Charles Schwab, TD Ameritrade, and E-Trade Financial.
- On October 1, 2019, Charles Schwab said that it would end commissions for online trading in stocks, ETFs, and options. Later in the day, rival brokerage firm TD Ameritrade made a similar announcement.
- On October 2, 2019, E-Trade Financial also announced that it would get rid of its commission fees on stocks, ETFs, and options trades.
- On November 21, 2019, unofficial news started to circulate about a possible merger deal between Charles Schwab and TD Ameritrade.
- On November 25, 2019, Charles Schwab officially announced a $26 billion merger deal with TD Ameritrade. The company said that it finalized plans on November 24, 2019.
- On January 29, 2020, Charles Schwab and TD Ameritrade received the second request for information from the Department of Justice’s antitrust division. The two companies said they would cooperate fully with the Department of Justice. They expect to close the merger deal in the second half of 2020.
- In May 2020, TD Ameritrade and Charles Schwab filed a supplement to their joint prospectus to put to rest about eight lawsuits concerning the misleading registration statement.
- On June 4, 2020, Charles Schwab said that the Department of Justice approved its merger with TD Ameritrade on June 3, 2020. TD Ameritrade shareholders voted on the deal on the same day. Two-thirds of shareholders were in favor of the deal, which supersedes a Delaware lawsuit that aimed to block it.
What's the Schwab and TD Ameritrade merger close date?
The Charles Schwab and TD Ameritrade merger transaction will likely close by the end of 2020. Integration efforts will start immediately thereafter. The full technology integration will likely take about 18 to 36 months to complete after the transaction closes.
Schwab and TD Ameritrade merger antitrust
The merger deal between Charles Schwab and TD Ameritrade faced various lawsuits. The complaints alleged that the two companies’ boards filed misleading registration statements. Some investment advisors also raised antitrust concerns that the merger deal would reduce innovation and competition among the companies acting as custodians to independent advisors. However, the merger deal received antitrust approval from the Department of Justice in June 2020.
