Online brokerage TD Ameritrade is buying Scottrade in a $4-billion cash-and-stock deal that would tie two major players in the day-trading industry at a time when an increasingly large number of investors are choosing index funds over stock picking.
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.
The deal is targeted to close by Sept. 30, 2017.