Schwab acquisition of TD Ameritrade 'creates significant uncertainty' for Nebraskans, Ricketts says

Charles Schwab will buy Omaha-based TD Ameritrade for $26 billion, Schwab announced on its website Monday morning. About 2,300 people work in the company’s headquarters, pictured, near Interstate 680 and West Dodge Road.

OMAHA -- San Francisco-based Charles Schwab Corp. said Monday it will acquire Omaha-based online brokerage firm TD Ameritrade for about $26 billion.

Schwab said the corporate headquarters of the combined company eventually will relocate to Schwab’s new campus in Westlake, Texas. How that affects the 2,300 workers in Omaha isn't clear. "We have not provided that level of specificity yet," Schwab spokeswoman Mayura Hooper said Monday morning.

A release from Schwab did say, however, that the combined firm will save money through "elimination of overlapping and duplicative roles. Additional synergies are expected to be achieved through real estate, administrative and other savings. Details on these synergies will be shared at a later date, once the integration process is underway."

In a "frequently asked questions" section on TD Ameritrade's website, TD Ameritrade said the move "will have an impact on our people. We are combining two firms with complementary brands and business models...

"Because of this, we expect there will be workforce reductions," the statement continued. "We believe that a large number of TD Ameritrade Associates will continue on with Schwab post-integration, but there will likely also be many that do not."

As for what will happen in Omaha and other TD Ameritrade locations, the FAQ section said, "For now it’s business as usual ..."

Besides its headquarters in Omaha, TD Ameritrade also has facilities in Southlake, Texas; St. Louis; Chicago; Ann Arbor, Michigan; Denver; Draper, Utah; San Diego; Jersey City; and Columbia, Missouri.

Schwab was specific about the effect — or, rather, lack of one — on San Francisco employees:

"Schwab was founded in San Francisco and has maintained a longstanding commitment to the Bay Area, which will continue. A small percentage of roles may move from San Francisco to Westlake over time, either through relocation or attrition. The vast majority of San Francisco-based roles, however, are not anticipated to be impacted by this decision. Schwab expects to continue hiring in San Francisco and retain a sizable corporate footprint in the city."

Both companies have a sizable presence in the Dallas-Fort Worth area, Schwab said. The move will allow the combined firm to take advantage of the central location of the new Schwab campus to serve as the hub of a network of Schwab branches and operations centers that span the entire U.S., and beyond. Any additional real estate decisions will be made over time as part of the integration process.

The integration of the two firms is expected to take between 18 and 36 months, following the close of the transaction. Schwab has named Senior Executive Vice President and Chief Operating Officer Joe Martinetto to oversee the integration, assisted by a team of experts from both Schwab and TD Ameritrade.

Once the transaction receives all regulatory approvals and the likely late 2020 deal closure, TD Ameritrade said, “integration efforts will begin immediately thereafter. More specific details will be shared later after integration planning is underway."

The move had been reported last week in national news media outlets but wasn't confirmed until Schwab posted a statement on its website at 3 a.m. Pacific time Monday. Last week's reports generated buzz and concern among TD Ameritrade's Omaha employees on what the move could mean to them and Omaha.

Under the agreement, TD Ameritrade stockholders will receive 1.0837 Schwab shares for each TD Ameritrade share.

“We have long respected TD Ameritrade since our early days pioneering the discount brokerage industry, and as a fellow advocate for investors and independent investment advisors," Schwab President and CEO Walt Bettinger said in the Schwab press release. "With this transaction, we will capitalize on the unique opportunity to build a firm with the soul of a challenger and the resources of a large financial services institution that will be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.”

With the announcement, the TD Ameritrade board of directors has suspended its previously disclosed CEO search, naming Stephen Boyle, TD Ameritrade's executive vice president and chief financial officer, as the company’s interim president and CEO. Boyle will assume leadership of the company effective immediately, Schwab said, guiding its management team through its fiscal 2020 plan and the proposed integration with Schwab.

“Partnering with Schwab on this transformative opportunity makes the right strategic and financial sense for TD Ameritrade,” Boyle said. “We share a common history — a journey since 1975 that has made Wall Street more accessible and financial dreams more attainable for millions of Americans. Our associates are fiercely proud of that legacy and all that we have accomplished to make TD Ameritrade one of the premier firms in financial services. Now we look to join forces with a respected firm like Schwab that shares our relentless focus, and to do more than we could do apart. Together, we can deliver the ultimate client experience for retail investors and independent registered investment advisors."

Monday's announcement "creates significant uncertainty for the thousands of Nebraskans who have loyally worked for the company through the years," Nebraska Gov. Pete Ricketts said.

TD Ameritrade was started by Ricketts' father, Joe Ricketts.

"As governor and the former COO of Ameritrade, I am anxious to see what their decision means for the people of Nebraska," Ricketts said in a press release.

“In the coming days, I will work to personally make the case to Schwab to stay committed to Omaha," Ricketts said. "Our cost of doing business is incredibly competitive and our people are the most hardworking in the nation. We can help Schwab be successful and take their business to the next level as they compete nationally and internationally.”

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