Two of the leaders of the online brokerage industry are merging. Charles Schwab agreed to buy TD Ameritrade for $26 billion, the companies announced Monday.
“We have long respected TD Ameritrade,” said Schwab CEO Walt Bettinger, in a statement. “With this transaction, we will capitalize on the unique opportunity to build a firm with the soul of a challenger and the resources of a large financial services institution.”
The combined company would be a brokerage behemoth. It will have 24 million customer accounts with more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25 billion.
The deal comes a month after both companies announced plans to eliminate commissions for most online trades, a move that is great for their customers but left analysts and investors in these stocks wondering how Schwab and TD Ameritrade would make up for the loss in revenue.
