TD Ameritrade to buy Scottrade for $4bn
Nebraska-based online broker TD Ameritrade is to acquire US discount brokerage firm Scottrade in a cash and stock transaction valued at $4 billion, resulting in its branch network more than quadrupling in size.
For TD Ameritrade, it says it will get a network of nearly 500 branches employing more than 1,000 investment consultants. It will also get more than three million client accounts and $170 billion in assets under management.
Tim Hockey, TD Ameritrade president and chief executive officer, says the deal means it can “increase” scale and “further accelerate” its “asset gathering capabilities”.
The transaction, which has been approved by the boards of directors of TD Ameritrade, TD Bank Group (TD) and Scottrade, will take place in two, concurrent steps.
First, TD will purchase Scottrade Bank from Scottrade Financial Services for $1.3 billion in cash consideration. The bank will merge with and into TD Bank, an indirect wholly-owned subsidiary of the Toronto-Dominion Bank.
Straight after that, TD Ameritrade will acquire Scottrade Financial Services, for $4 billion, or $2.7 billion net of the proceeds from the sale of Scottrade Bank.
Scottrade founder and CEO Rodger Riney will be appointed to the TD Ameritrade board of directors.
The transaction is subject to regulatory approval and customary closing conditions. The parties expect it to close by 30 September 2017.