TOWN AND COUNTRY, Mo. (KMOX/AP) – (UPDATED 7:57 a.m.) It’s official, Town and Country-based Scottrade has agreed to be purchased in a $4 billion cash-and-stock deal by TD Ameritrade, and Scottrade Bank is being sold to TD Bank Group.
In the two-stage deal announced Monday, TD Bank Group will buy Scottrade Bank from Scottrade Financial Services Inc. for $1.3 billion in cash. Scottrade Bank will be folded into TD Bank and it will buy 11 million shares from TD Ameritrade for $400 million. Then, TD Ameritrade will buy Scottrade Financial Services for $4 billion.
Scottrade Founder and CEO Rodger Riney confirmed the deal in a letter to clients, posted on the company’s website. The headline reads: “Scottrade and TD Ameritrade Coming Together as One.”
In it, Riney says it will take 9-12 months for the transactions to close, so it should be completed by Sept. 30, 2017.
“Until then,” Riney writes, “we will be operating as separate and independent companies. That means it is business as usual at Scottrade.”
The letter does not address what may happen to Scottrade’s 1,800 St. Louis-area employees. A TD Ameritrade spokeswoman tells KMOX the current plan is to keep a service center and some corporate support services in St. Louis. However, she says those decisions will be made during the integration process.
The center would employ between 500 and 1,000 people in St. Louis.
The spokeswoman also says the title of home arena of the St. Louis Blues, Scottrade Center, would be changed to TD Ameritrade Center after the deal closes.
TD Ameritrade said that the transaction adds significant scale to its retail business and more than quadruples the size of its branch network. It anticipates about $450 million in combined annual expense savings.
Combined, TD Ameritrade and Scottrade had $944 billion in total client assets and 600,000 average client trades per day for the year ended Sept. 30, on a pro forma basis.
Bloomberg Radio’s Steve Potisk says the deal combines the two biggest online brokerages. It also gives Toronto-based Dominion Bank, TD Ameritrade’s largest stakeholder, larger US banking operations. It already has branches up and down the east coast.
Up until now Scottrade officials haven’t commented on the sale. One reason the company may have been on the block, the 70-year-old Riney was diagnosed with cancer last year.
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