TD Ameritrade lines up Scottrade Finance acquisition

Scottrade Financial Services has agreed to be taken over by TD Ameritrade Holding Corp, in a transaction which also involves the latter's majority stakeholder, Toronto-Dominion Bank.

TD Ameritrade is to take over the trading group's brokerage services for $2.7bn in cash and stock, while TD Bank Group will acquire its banking operations for $1.3bn in cash.

Brokerages are currently facing a difficult environment as intense competition has led to a weak trading volumes and slow revenue growth.

CEO and controlling shareholder of Scottrade will join Ameritrade's board as a result of the transaction.

Ameritrade CEO Tim Hockey said that the merger will allow the companies to grow in a competitive environment.

"This combination will allow us to leverage our strengths and increase our scale, further accelerate our asset-gathering capabilities, and introduce our award-winning lineup of trading tools, products, and education services to millions of new investors," Hockey said in a statement.

The deal is expected to close in September 2017, with Barclays and Goldman Sachs acting as advisers for Ameritrade and Scottrade respectively.