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Schwab Set to Buy Rival TD Ameritrade

If you can’t beat them, join them.

As if the race to zero commissions charged by the major retail brokerages wasn’t enough to juice the market, reports of retail broker Charles Schwab buying rival TD Ameritrade have surfaced, as first reported by CNBC, citing a source.

The deal would create a mega-retail brokerage behemoth with upwards of $5.1 trillion in assets between the two – $3.8 trillion from Schwab and the balance from TD. The deal is expected to be announced soon, the source told CNBC.

“This would create a Goliath in Wealth Management,” Wells Fargo senior analyst Mike Mayo said in a note to clients on Thursday.

Shares of TD Ameritrade soared 15% on Thursday, on pace for its best day since September 2008. Schwab’s shares surged 8%, on pace for its best day since September 2015.

Schwab will pay $25 billion for TD Ameritrade, the Financial Times reported Thursday.

Schwab CEO Walter Bettinger has been designated to run the combined company, sources said. TD Ameritrade CEO and President Tim Hockey said in July he is leaving the brokerage in February of 2020.