Charles Schwab reportedly seeking to buy TD Ameritrade in $26 billion deal
Charles Schwab is reportedly offering $26 billion for its smaller rival TD Ameritrade – a deal that would combine two of the nation's largest discount brokers.
A deal could be announced as early as Thursday, according to CNBC, which first reported the firms were in talks. A combined brokerage firm would have more than $5 trillion in combined assets, about $3.8 trillion from Schwab and $1.3 trillion from TD Ameritrade.
The transaction would allow Charles Schwab to better compete with larger global investment firms such as BlackRock, according to Fox Business, whose Maria Bartiromo confirmed the deal independently from sources.
Shares of TD Ameritrade surged more than 24% to more than $52 in trading before the bell. Schwab shares were up 10%.
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Neither company immediately responded to USA TODAY's request for comment.
The combined firm is expected to be run by Charles Schwab CEO Walter Bettinger, Fox Business reported, and TD Ameritrade chief financial officer Steve Boyle will lead the target company until the deal is completed.
Discount brokers have found themselves in a price war, which Schwab helped escalate when last month it dropped commissions for online trading of U.S. stocks and exchange-traded funds.
A deal between the largest and second-largest discount brokerages “is largely about scale,” Argus Research analyst Stephen Biggar told Reuters. “I believe a merger could present substantial cost synergies.”
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
This article originally appeared on USA TODAY: Charles Schwab, TD Ameritrade in talks on $26B deal, reports say
