TD Ameritrade Holding Corp. (NASDAQ: AMTD) with the largest shareholder Toronto-Dominion Bank, announced the acquisition of Scottrade Financial Services Inc. for $4 billion. This is a merger of two of the of the largest online brokerage companies.
The deal clearly represents a response pressure from lower trading volumes and slow revenue growth. It is not the first major deal in this industry. Earlier in July, E*TRADE Financial Corp (NASDAQ: ETFC) acquired Aperture New Holdings Inc., parent of the futures and options trading platform OptionsHouse, in a $725 million cash deal.
TD Ameritrade CEO Tim Hockey said, “This combination will allow us to leverage our strengths, increase our scale and further accelerate our asset gathering capabilities.” He also expressed concerns about a possible backlash from regulators, saying, “We certainly believe the regulators will look fairly at this deal and will opine… I still think this is a considerably competitive marketplace, that’s for sure. There are lots of opportunities for additional competitors to get into our space and continue to drive price competition."