By Colin Kellaher 

Charles Schwab Corp. on Monday said it agreed to buy smaller rival TD Ameritrade Holding Corp. in a stock-swap transaction valued at about $26 billion.

San Francisco-based Schwab said it will issue 1.0837 shares for each TD Ameritrade share.

The deal values TD Ameritrade at $52.23 a share, a roughly 8.5% premium to Friday's closing price for the Omaha, Neb., company.

TD Ameritrade shares rose 2.4% to $49.26 premarket, while shares of Schwab rose 1% to $48.64.

Toronto-Dominion Bank will hold a roughly 13% stake in Schwab following Schwab's all-stock acquisition of TD Ameritrade, Schwab said Monday.

The Toronto financial-services company, which currently owns a 43% interest in TD Ameritrade, will also have the right to name two directors to the Schwab board.

However, Schwab said Toronto-Dominion's voting stake will be capped at 9.9%, with the balance of its position held in a new, nonvoting class of common stock.

TD Ameritrade's other shareholders will own about 18% of the combined company, while existing Schwab holders will own about 69%, Schwab said.

Separately, TD Ameritrade said it has suspended its search for a new chief executive after the discount broker agreed to be acquired by Charles Schwab.

TD Ameritrade launched the search in July after announcing that its current CEO, Tim Hockey, planned to step down by the end of February.

TD Ameritrade said that Stephen Boyle, currently executive vice president and chief financial officer, would serve as interim president and chief executive, effective immediately.

The company said Mr. Boyle would guide its management team through its fiscal 2020 plan and the proposed integration with Schwab.

Write to Colin Kellaher at colin.kellaher@wsj.com

 

(END) Dow Jones Newswires

November 25, 2019 06:58 ET (11:58 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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