Now that Schwab’s $26 billion acquisition of TD Ameritrade is officially underway, executives at both firms will be turning their attention to closing the deal. Pending the necessary regulatory approvals, the deal is expected to be finalized in the second half of 2020 and will include relocating the combined company’s headquarters out of San Francisco.
“As part of the integration process, the corporate headquarters of the combined companies will eventually relocate to Schwab’s new campus in Westlake, Texas,” according to information provided by Schwab. Last year the firm opened a tech accelerator in the Lone Star State’s capital of Austin.
Schwab owns 452,000 square feet of real estate in Austin, according to the firm's annual report, and leases another 318,000 square feet in Dallas. The firm leases its current 662,000-square-foot headquarters in San Francisco.
Schwab’s move from San Francisco to Westlake, a suburb of Dallas-Ft. Worth, Texas, won’t necessarily threaten the brokerage’s “longstanding commitment to the Bay Area,” according to the firm. It expects to continue hiring in San Francisco and said a “small percentage” of roles may move to the new headquarters in Texas.
TD Ameritrade has a facility in Southlake, Texas, immediately adjacent to Westlake, which can accommodate up to 2,000 employees, according to a 2018 report from The Dallas Morning News. TD Ameritrade’s 78-acre Southlake campus has already hosted an annual shareholders meeting and is second in size to its Omaha, Neb., headquarters. It has room for future expansions.
TD Ameritrade is also suspending its search for a CEO, which began in July with the announcement of Tim Hockey’s impending departure. Hockey will remain with TD Ameritrade through February 2020 to support interim President and CEO Steve Boyle, who was named chief financial officer of the firm in 2004. Boyle’s promotion is a direct result of the acquisition.
Following the close of the deal, both firms expect the integration to last somewhere between one-and-a-half to three years. TD Ameritrade Institutional has already emailed advisor clients a letter communicating the acquisition, according to the firm. The client letter “can serve as a foundation for any client outreach related to the initial news of this proposed acquisition,” the firm noted in information provided to advisors.
TDAI is recommending that advisors continue using the TDAI platform until the full conversion, “as transitioning with the official conversion will be much simpler than doing so on your own. However, advisors have the option to transition their business to Schwab prior to the full conversion.”
“Partnering with Schwab on this transformative opportunity makes the right strategic and financial sense for TD Ameritrade,” Boyle said in a statement. “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.”
