Charles Schwab is acquiring TD Ameritrade in an all-stock transaction valued at $26 billion, the company announced Monday. TD Ameritrade shares were higher on the news.
Schwab will pay approximately 1.0837 Schwab shares for each TD Ameritrade share. The deal represents a 17 percent premium to Ameritrade’s 30-day volume weighted average price. TD Shareholders will own about 13 percent of the combined company once the deal is complete.
The deal is expected to be 10 percent to 15 percent accretive to earnings and 15 percent to 20 percent accretive to operating cash earnings per share in year three.
TD Ameritrade Chief Financial Officer Stephen Boyle will act as the interim president and CEO, helping the company with its fiscal year 2020 plan and integration with Schwab. Boyle will assume leadership effective immediately.
Following the close of the deal, TD Bank will have the opportunity to name two board members and TD Ameritrade will name a director.