TD Bank and TD Ameritrade to buy Scottrade

CBJ — Toronto-Dominion Bank and TD Ameritrade are acquiring Scottrade Financial Services for $4 billion in a deal that would combine two of the biggest U.S. discount brokerages.

TD Ameritrade, the largest U.S. discount brokerage by trade executions, said it would pay $2.7 billion for Scottrade’s brokerage business. Toronto-Dominion Bank, TD’s largest shareholder, is acquiring Scottrade Bank for $1.3 billion.

Discount brokerages are facing weak trading volumes and slow revenue growth as wealth managers cut fees amid intense competition, sparking consolidation within the industry.

The $2.7 billion comprises $1 billion in new common TD Ameritrade shares and $1.7 billion in cash.