TD Ameritrade shares spike 25% as market anticipates deal

Charles Schwab acquisition of TD would create $5 trillion brokerage operation

Nov 21, 2019 @ 8:48 am

By Jeff Benjamin

Shares of TD Ameritrade Holding Corp. were up nearly 25% in premarket trading Thursday morning in anticipation a blockbuster announcement that Charles Schwab Corp. will buy the rival discount brokerage operation for a reported $26 billion.

Schwab stock was up nearly 11% in premarket trading.

According to a report from Fox Business, which broke the news Wednesday evening, the deal will enable Schwab to better compete with the likes of BlackRock.

The deal, which would create a company with $5 trillion in combined assets, comes on the heels of a price war last month that saw Schwab cut most of its trading commissions to zero. The move was followed shortly thereafter by TD Ameritrade, ETrade and Fidelity Investments.

According to reports, Schwab CEO Walt Bettinger is expected to run the combined company. TD CEO Tim Hockey announced in July that he will resign from his post in February 2020.

TD chief financial officer Steve Boyle is expected to lead the company until the deal is completed.

This year through Wednesday, Schwab's stock price had gained just under 5%, while TD shares were down more than 18%. Over the same period, the S&P 500 Index is up more than 21%.

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