US financial services providers Charles Schwab and TD Ameritrade have inched towards closing their previously announced $26bn all-stock merger after securing antitrust clearance and shareholders’ approval.
The firms said that the antitrust division of the United States Department of Justice (DOJ) informed them about its decision to close its investigation of the proposed merger.
Based in Nebraska, TD Ameritrade offers investment services and consultation to approximately 12 million client accounts, and custodial services to over 7,000 registered investment advisors. On the other hand, the California-based Charles Schwab provides wealth management, asset management, securities brokerage, banking, custody, and financial advisory services.
Terms of the Charles Schwab, TD Ameritrade merger
As per the deal signed in November 2019, Charles Schwab said that it will acquire TD Ameritrade by issuing 1.0837 of its shares in exchange for each of the latter’s shares.
Following the completion of the merger, The Toronto-Dominion Bank (TD Bank), which currently has about a 43% stake in TD Ameritrade, will own nearly 13% in the combined company. Other TD Ameritrade’s stockholders will hold a stake of 18% while existing Charles Schwab’s stockholders will own the remaining 69% stake in the enlarged group.
TD Ameritrade’s shareholders have approved the merger agreement, with over 99% of the votes cast being voted in favor of the deal. Likewise, Charles Schwab said that more than 99% of the shares cast by its stockholders were voted in favor of the proposal to issue new common shares of the company to TD Ameritrade’s stockholders as consideration for the acquisition.
Charles Schwab president and CEO Walt Bettinger said: “The combination will generate substantial long-term value for Schwab’s stockholders and bring together two leading firms with proud and similar histories of making investing more accessible to all.
“Together, with a focus on low cost, great service and technology, we will form a company that is uniquely positioned to serve the investment, trading and wealth management needs of investors—and the advisors who serve them—in every phase of their financial journey.”
TD Ameritrade said that planning for integration is on-track and the transaction is likely to be completed in the second half of the year. Integration is anticipated to take between 18 to 36 months to complete following the closing of the deal.
The transaction continues to be subject to customary closing conditions, including receipt of the other required regulatory approvals.
