TD Ameritrade to acquire Scottrade

St. Louis, MO: (STLRealEstate.News) The St. Louis Business Journal this week reported a deal was imminent between TD Ameritrade and St. Louis-based discount brokerage Scottrade. Scottrade this week announced they have agreed to be acquired by rival TD Ameritrade in a cash and stock deal valued at $4 billion. Omaha, Nebraska-based TD Ameritrade Holding Corp. and the privately held Scottrade Financial Services Inc. announced they deal last week.

In what is expected to be an official two-step transaction, TD Bank Group will buy Scottrade Financial’s banking unit, for $1.3 billion in cash and merge it into TD Bank NA, which is actually a subsidiary of the Toronto-Dominion Bank. Once that first step is completed, TD Ameritrade will buy Scottrade Financial Services for $2.7 billion. The $2.7 billion will be broken down into $1 billion in new common equity issued to Scottrade shareholders and $1.7 billion in cash.

Once the deal closes, Scottrade founder and CEO Rodger Riney, who owns the business with his whole family, will join TD Ameritrade’s board. Riney is currently undergoing treatment for multiple myeloma, a form of blood cancer.

Bloomberg announced that Riney’s 75 percent share in Scottrade is valued at close to $2.2 billion currently. The transactions, which have been approved by the boards of TD Ameritrade, TD Bank Group, and Scottrade, are expected to officially close by September 30, 2017. The Scottrade name will be phased out of the operation in the mean time, until it is fully absorbed into the TD Ameritrade structure.

TD Ameritrade is excited about their deal, and expects close to $450 million in combined annual expense synergies and over $300 million “in additional longer-term opportunities.” Most of the $450 million in expense cuts will come from cuts in headcount.

The company plans to keep Scottrade’s significant presence in St. Louis, with between 500 and 1,000 jobs currently planned for the region.

Contributing Editor: Alexandra R. Fasulo

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