M and A
Shareholders, DoJ Clear Barriers To Charles Schwab, TD Ameritrade Merger
The US Department of Justice's anti-trust department has closed its investigation into one of the largest M&A deals to affect financial services in years.
Shareholders of Charles Schwab yesterday voted to approve the US firm’s $26 billion acquisition of TD Ameritrade - a deal that is part of a consolidation trend in the discount brokerage space.
Separately, the Department of Justice has closed its probe into the proposed deal, removing the threat of an anti-trust roadblock to the transaction.
More than 99 per cent of the shares cast by Schwab stockholders were voted in favor of a proposal to issue new Charles Schwab common shares to TD Ameritrade stockholders as consideration for the acquisition, the firm said in a statement.
“The combination will generate substantial long-term value for Schwab’s stockholders and bring together two leading firms with proud and similar histories of making investing more accessible to all,” Schwab president and CEO Walt Bettinger said.
As reported when the acquisition was first announced in November last year, Charles Schwab is moving its headquarters from San Francisco to Westlake, Texas. TD Ameritrade already has a large presence in the Lone Star State. The shift in some ways fits with a pattern of businesses quitting California for less highly taxed parts of the US, such as Texas and Florida.
In February, rival Morgan Stanley said that it had agreed to buy E*Trade, a further consolidation move in the space.
Besides its renowned brokerage business, Charles Schwab works with RIAs and other wealth providers via its Schwab Advisory Services arm. Charles Schwab moved to a subscription-driven financial planning option for its digital advisory service. The firm also holds a major conference annually, its IMPACT event, with the most recent due at the start of November.
Meanwhile, on the higher ends of the wealth spectrum, in April 2018 Family Wealth Report reported that Charles Schwab is ramping up its efforts to serve the family offices industry, a move that pits it against the likes of Fidelity Investments.
