Yesterday, Ameritrade Holding Corp. announced that it plans to acquire its competitor, TD Waterhouse USA, from Toronto-Dominion Bank.
The deal is worth about $2.9 billion and will be an all stock transaction. After the deal reaches completion, the combined company will be named TD Ameritrade.
Ameritrade CEO Joe Moglia stated, “The acquisition of TD Waterhouse U.S.A. is the right deal for Ameritrade. This opportunity accelerates our long-term investor strategy with access to branches and advice, while maintaining an industry leading pre-tax margin.”
“We expect that it will create significant value for shareholders by generating substantial cost synergies and deliver a more diverse revenue mix by shifting to an asset-gathering model,” said Moglia. “This exciting combination builds upon Ameritrade’s strong track record as a leading industry consolidator and creates an even more robust platform for future consolidation and growth.”
Included on the combined company’s board of directors, will be Ameritrade founder J. Joe Ricketts, who is also chairman of the combined company. It will also include vice-chairman Ed Clark, the CEO of TD Bank Financial Group, Moglia, J. Peter Ricketts, president and COO of TD Ameritrade and Thomas S. Ricketts. Other members will be selected before the acquisition closes.
“This transaction is a strategic and natural one for TD Bank Financial Group, as it provides immediate value to shareholders, reaffirms our commitment to the on-line brokerage business and extends our opportunities for further growth in the U.S.,” said TD Bank Financial Group President and CEO Ed Clark.
“By having our strong TD Waterhouse U.S.A. franchise become part of Ameritrade, TD has gained a significant stake in a powerful industry leader,” Clark continued. “a stake that gives us the opportunity to actively contribute to the strategic direction as TD Ameritrade grows and strengthens the TD brand in the U.S. Consistent with our history of aligning with well-run companies, Ameritrade has a strong management team whose expertise will benefit clients and shareholders alike.”
The two companies expect the deal to be closed in about six months. It is still subject to approval by shareholders of Ameritrade, as well as regulatory approvals in the U.S. and Canada.
Chris is a staff writer for murdok. Visit murdok for the latest ebusiness news.
