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Charles Schwab close to agreeing an acquisition of TD Ameritrade: CNBC
Posted on Thursday, 21 November 2019 14:28
Charles Schwab is interested in buying brokerage TD Ameritrade, with an agreement potentially being announced as soon as today, a person close to the situation told CNBC. Fox Business also cited unidentified sources familiar with the matter as saying the price is expected to be around USD 26.00 billion and would create a firm with roughly USD 5,000 billion in combined assets. Zephyr, the M&A database published by Bureau van Dijk, shows this would be the largest deal targeting investment banking and securities dealing companies announced worldwide in 2019 to date. Shares in TD Ameritrade rose 1.8 per cent to USD 41.38 at 06:53 in premarket trading today, giving the business a market capitalisation of USD 22.41 billion. Charles Schwab’ stock price was boosted slightly to USD 44.75 at 06:50 following the media reports, valuing the total outstanding scrips at USD 57.38 billion. A tie up between the two would consolidate an industry that has been going through disruption in recent months with all major brokerages announcing plans to go to zero commissions, CNBC observed. TD Ameritrade provides investing services and education to around 12.00 million client accounts totalling about USD 1,300 billion in assets and custodial services to more than 7,000 registered advisors. The company claims to be a leader in US retail trading, with an average of 800,000 trades per day, more than a quarter of which are made on mobile devise. Charles Schwab is a provider of financial services with more than 365 offices, 12.10 million active brokerage accounts, 1.70 million corporate retirement plan participants and 1.40 million banking accounts. It managed USD 3,770 million-worth of assets at 30th September 2019. The business announced another large deal earlier this year, agreeing to buy USAA’s brokerage and wealth management operations for USD 1.80 billion. According to Zephyr, there have been 228 deals targeting investment banks and securities dealers announced worldwide since the start of 2019. In the largest to date, CITIC Securities agreed to acquire Guangzhou Securities for CNY 13.46 billion (USD 1.91 billion). Stifel Financial, Macquarie Group, Mediobanca and Banco BTG Pactual, among others, have also been targeted in the year so far. © Zephus Ltd