TD Ameritrade to buy Scottrade in $4B cash-and-stock deal

TD Ameritrade to buy Scottrade in $4B cash-and-stock deal

As part of the deal, Toronto-Dominion Bank, which holds an approximately 42% stake in TD Ameritrade, is buying Scottrade's banking business for $1.3 billion in cash, the news service writes. "The more clients you have, the less expensively you can offer services to clients".

Town & Country, MO (KTRS) TD Ameritrade is buying rival Scottrade Financial Services.

Both TD Ameritrade, formed in 2006 and headquartered in Omaha, and the privately held Scottrade, founded in 1980 in Scottsdale, Ariz., specialize in low-priced stock trading for small investors.

Looking ahead, the company expects trading and organic growth to drive fiscal 2017 results, with a focus on managing expenses and generating savings that can be invested in initiatives to fuel future growth. Furthermore, the transaction is expected to generate double-digit EPS accretion post-conversion.

Then, TD Ameritrade will buy Scottrade Financial Services for $2.7 billion in cash and stock.

Additionally, following the transaction's close, Scottrade Founder and CEO Rodger Riney will be appointed to the TD Ameritrade Board of Directors.

"After the integration, we'll have between 500 and 1,000 jobs in the St. Louis area", Hockey said, adding that Scottrade's 3,700 employees nationwide will total about half that figure following the sale.

Ameritrade CEO Tim Hockey said that the merger will allow the companies to grow in a competitive environment. The company announced past year that he was undergoing treatment for multiple myeloma, a form of blood cancer.

The Canadian bank's closely watched capital measure, the CET1 ratio, is projected to decrease by 30 basis points from where it sits 10.4 per cent as a result of the transaction.

In it, Riney says it will take 9-12 months for the transactions to close, so it should be completed by September 30, 2017. Goldman, Sachs & serving as financial advisor to Scottrade, and Sullivan & Cromwell is serving as legal advisor to Scottrade.