TD Ameritrade jumps as much as 6% after DOJ approves Charles Schwab takeover deal
- Charles Schwab, the online broker, has received approval from the Justice Department for its acquisition of TD Ameritrade, CNBC reported Thursday.
- TD Ameritrade surged as much as 6% Thursday. Shares of Charles Schwab gained nearly 3% the same day.
- Both companies expect the deal to close in the second half of 2020, according to the report.
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Shares of TD Ameritrade surged as much as 6% on Thursday after CNBC reported that Charles Schwab, the online brokerage firm, received approval from the Justice Department for its acquisition of the company.
Charles Schwab also gained nearly 3% in intraday trading Thursday. The company announced in November that it agreed to buy TD Ameritrade, a rival brokerage, in a $26 billion all-stock deal.
Together, the two companies will create a mega-brokerage with more than $5 trillion in assets — $3.8 trillion from Schwab, and $1.3 trillion from Ameritrade.
The size of the deal raised some concerns about Schwab's dominance in the registered investment adviser industry, according to CNBC. The DOJ did not find any violations, according to the report. Both companies expect that the deal will close in the second half of 2020.
The brokerage industry has undergone a significant disruption over the last year. At the end of 2019, all major brokerages dropped commission fees after Schwab first eliminated them in October.
Following the race to drop commission fees, consolidation of the industry was expected, according to the report. The next deal likely to be approved is Morgan Stanley's acquisition of E-Trade.
TD Ameritrade has shed roughly 12% year-to-date.
