NEW YORK - The US brokerage firm Charles Schwab announced Monday it will acquire rival TD Ameritrade for around $26 billion.
Under the all-stock deal between these two huge discount brokerage houses, TD Ameritrade shareholders will receive 1.0837 shares of Charles Schwab for each share they own, the latter said in a statement.
The boards of both companies approved the terms of the deal unanimously. US regulators must still rule on it.
Charles Schwab said the price it is paying represents a 17 percent premium over the 30-day volume weighted average price exchange ratio as of November 20.
In the 1970s the two companies revolutionized the way small investors placed their money on Wall Street by taking on big established brokerages that set the rules for such transactions and often charged handsome fees for their services.
The deal comes amid stiff competition in the brokerage industry to lure small investors who are increasingly fond of financial products that are affordable and easy to use.
The companies could take between 18 and 36 months to merge. Once this is done the new company will have around 5 trillion dollars in client assets under its management.
source: news.abs-cbn.com
