The two-step deal will quadruple the size of TD Ameritrade's branch network and expand its reach into mid-sized U.S. markets. Fred Katayama reports.
Two of the biggest U.S. discount brokerages are combining. TD Ameritrade is buying Scottrade in a two-step deal that will vastly expand its retail presence. First, TD Bank Group, which owns 42 percent of TD Ameritrade, will buy Scottrade Bank from Scottrade Financial Services for $1.3 billion and merge it into its North America operations. Then, TD Ameritrade will buy Scottrade Financial Services for $4 billion. TD Ameritrade CEO Tim Hockey: SOUNDBITE: TIM HOCKEY, CEO, TD AMERITRADE, (ENGLISH) SAYING: "It's a deal that adds significant scale to our retail business, extends our leadership in trading, and more than quadruples the size of our branch network. It's a strong strategic fit, one that aligns well with our client strategy and our growth, and it's a strategy that starts and ends with the client and our commitment to delivering a superior experience." TD Ameritrade will now have around 450 branches and will expand to mid-sized markets. TD Ameritrade expects the acquisition to produce $450 million in cost savings over the next two years.The companies expect to close the deal by next September. TD Ameritrade shares fell at the market open. TD Bank was flat. Scottrade is privately held.