OMAHA, Oct. 24 (UPI) -- Discount brokerage firm TD Ameritrade will purchase competitor Scottrade Financial in a $4 billion deal, both companies announced Monday.
TD Bank Group, which owns 42 percent of TD Ameritrade, will also increase its stake in the combined company. In the acquisition, TD Bank Group will purchase Scottrade Bank from Scottrade Financial Services for $1.3 billion in cash, and will also purchase $400 million in new common equity from TD Ameritrade. TD Ameritrade will then acquire Scottrade Financial Services Inc. for $4 billion, or $2.7 billion after it sells a division, Scottrade Bank.
Both TD Ameritrade, formed in 2006 and headquartered in Omaha, and the privately held Scottrade, founded in 1980 in Scottsdale, Ariz., specialize in low-cost stock trading for small investors. The combined company will have 600,000 average client trades per day, and $944 billion in client assets, the Wall Street Journal reported.
Scottrade CEO Roger Riney is expected to join the board of TD Ameritrade.