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US: Charles Schwab to buy TD Ameritrade for $26B?

 |  November 21, 2019

Charles Schwab is buying TD Ameritrade Holding for $26 billion, with a deal expected to be announced Thursday (November 18), Fox Business reports.

A deal would create a firm with roughly $5 trillion in combined assets, consolidating an industry under pressure from a price war that escalated when Schwab last month announced plans to eliminate commissions for US stocks, exchange traded funds and options.

TD Ameritrade’s current CEO Tim Hockey, who announced in July that he would leave by the end of February, has acknowledged that his firm’s decision to adopt zero commissions, as Schwab and rivals E-Trade and Fidelity have done, would prompt speculation about mergers.

“We will take a look at anything that makes financial and strategic sense,” he said last month, outlining the company’s plans to make up for lost revenue of as much as $240 million a quarter from the new commission structure. “Scale is important. We have scale. We’re very comfortable with our earnings power now, even in this new environment.