Schwab sets closing date for TD deal after clearing last hurdle

After passing a key regulatory hurdle, Charles Schwab is set to close its acquisition of TD Ameritrade Oct. 6, according to the company.

The Board of Governors of the Federal Reserve System gave its approval Sept. 30 for TD Bank, the second largest bank in Canada, to hold a minority stake in Schwab, the regulator said.

It was the last regulatory hurdle that the Schwab-TD deal had to clear, setting the stage for the combined company to become a $2 trillion RIA custodian, according to Cerulli’s latest figures from November 2019.

“We are very pleased with the Federal Reserve’s actions, which allow us to finalize our planned acquisition of TD Ameritrade,” Walt Bettinger, CEO of Schwab, said in a statement. “We are now focused on taking the last steps needed to close the transaction.”

Schwab had $4.5 trillion in client assets as of Aug. 31, according to the company. TD Ameritrade had total client assets of $1.5 trillion as of June 30, according to the firm.

The acquisition is still subject to customary closing conditions, according to Schwab.

A Schwab spokeswoman said “all necessary approvals of the proposed acquisition have now been received.” She declined to comment on what customary closing conditions remained.

Christopher Lee/Bloomberg

The Department of Justice closed its antitrust investigation of the deal in early June.

Following the deal’s close, the integration will take approximately 18 to 36 months, the company said. In November 2019, Schwab estimated it would cost an estimated $1.6 billion over a three-year period. Until then, Schwab and TD Ameritrade will continue to operate as separate broker-dealers, according to Schwab.

In August, Schwab said it would keep TD Ameritrade’s portfolio rebalancing software iRebal and options trading platform thinkorswim, although it hasn’t disclosed the fate of Veo, TD’s digital hub that independent RIAs use to integrate various pieces of technology.