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 Holdings Corp.
$34.31
11:00 08/07/16
Toronto-Dominion Bank
$16.97
11:00 27/10/20
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.