Charles Schwab Corp.’s reported plan to buy TD Ameritrade Holding Corp. for $26 billion is proving a boon for the fortunes anchored by two of America’s biggest brokerages.
TD Ameritrade founder Joe Ricketts is set to add $500 million to his $2.4 billion net worth after his firm’s shares rose 26% in early trading Thursday. Charles Schwab’s $8.8 billion fortune will rise by about $700 million based on his company’s early gains. The deal is worse news for Thomas Peterffy, chairman of rival Interactive Brokers Group Inc., who’s down about $200 million as of 7:30 a.m. in New York.
The transaction could be announced as early as Thursday, according to a person familiar with the matter. It would create a firm with roughly $5 trillion in combined assets, consolidating an industry under pressure from a price war that escalated when Schwab last month announced plans to eliminate commissions for U.S. stocks, exchange traded funds and options.
For Schwab, the net worth gain may be particularly sweet. In an October interview, he criticized wealth taxes like those proposed by Democratic presidential candidates Bernie Sanders and Elizabeth Warren as a “negative reward for success.”
Other winners from the potential acquisition include Toronto-Dominion Bank, which owns 43% of TD Ameritrade, and Canadian insurer Sun Life Financial Inc. with a 3.9% position, as of Sept. 30. Generation Investment Management LLP, the investment firm co-founded by former U.S. Vice President Al Gore, owned a 2% stake in Schwab at the end of the third quarter.
This article was provided by Bloomberg News.
See Also:
Schwab Reported In Talks To Buy TD Ameritrade
Schwab Nears Deal To Buy TD Ameritrade In Industry Overhaul