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Two Largest Brokers Unite as TD Ameritrade Buys Scottrade Financial for $4B

A TD Ameritrade sign is seen outside a branch in the financial district in New York
A TD Ameritrade sign is seen outside a branch in the financial district in New York February 29, 2016. REUTERS/Brendan McDermid

Amid industry-wide sluggish growth, TD Ameritrade announced on Monday it would buy privately held Scottrade Financial Services in a cash-and-stock deal valued at $4 billion.

TD Ameritrade, the biggest discount brokerage by trade executions, said it expected to realize about $450 million in combined annual expense synergies, and more than $300 million in additional longer-term opportunities once the deal closes.

Online brokerage platforms are used by financial advisers and private investors to trade without the use of traditional brick-and-mortar brokerage firms.

TD Ameritrade, which is 42 percent owned by Toronto Dominion Bank, said it expected to save about $450 million annually in combined expenses and more than $300 million in "additional longer-term opportunities" once the deal closes.

Rodger Riney, who founded Scottrade and is the company's CEO and controlling shareholder, will join TD Ameritrade's board after the close of the deal, the companies said. Riney said last year he was being treated for a form of blood cancer.