Charles Schwab agrees to buy TD Ameritrade for $26 billion - CNN

"We have long respected TD Ameritrade," said Schwab CEO Walt Bettinger, in a statement. "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."

The combined company would be a brokerage behemoth. It will have 24 million customer accounts with more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25 billion.

The deal comes a month after both companies announced plans to eliminate commissions for most online trades — a move that is great for their customers but left analysts and investors in these stocks wondering how Schwab and TD Ameritrade would make up for the loss in revenue.

Schwab said it would go to zero just a few days after smaller rival Interactive Brokers Group (IBKR) said it was ending commissions. But the decision by Schwab launched an immediate price war, with TD Ameritrade (AMTD), E-Trade (ETFC), Fidelity, Ally Invest (ALLY) and other smaller online brokers all quickly following suit.

The traditional discount brokers have all faced intense competition from Robinhood, a trading app popular with millennials that launched a few years ago with a no commission business model.

TD Ameritrade CEO Tim Hockey hinted that his company could be for sale in an interview with CNN Business last month after the company reported earnings.

"We will always take a look at something that makes strategic sense," Hockey said.

The fact that Hockey announced in July that he plans to step down once a successor was found only added to the rumors that TD Ameritrade was on the shopping block. TD Ameritrade said Monday it would suspend its CEO search.

"On the heels of all the zero-commission announcements, this was the inevitable next shoe to drop," said Bill Capuzzi, CEO of Apex Clearing, a custodian firm that holds securities for brokerages.

Capuzzi said the merger makes "a lot of sense," because the overlap in their respective businesses could save the combined company a huge amount of money. TD Ameritrade and Schwab estimate the deal will save the combined company up to $2 billion, some of which will be realized by layoffs.

Shares of Schwab (SCHW) fell slightly while TD Ameritrade's stock shot up 3% in premarket trading. E-Trade's shares fell more than 1%.

E-Trade could be the odd man out in a game of merger musical chairs. There has been on-and-off chatter for several years that E-Trade could be a good fit for Schwab.

But Kristi Ross, the co-CEO of financial tech firm tastytrade, which is the parent company of new online broker dough, thinks E-Trade could be a takeover target as well.

"We will definitely see more consolidation in the industry. It's a natural next step given more competition and the price disruption," said Ross, who is also the former CFO of thinkorswim, an online options trading firm which was bought by TD Ameritrade for more than $600 million in 2009.

But will a Schwab-TD Ameritrade merger get by federal regulators?

"This deal may face somewhat significant antitrust hurdles, depending on how the competitive market is viewed by relevant authorities," said KBW analyst Kyle Voigt said in a report Thursday morning.

It would all depend on what the government decides are the most pertinent competitors, Voigt said. Will officials just look at other online brokers like E-Trade and Fidelity or also consider big Wall Street firms like JPMorgan Chase (JPM) and Bank of America (BAC) as rivals?

Apex Clearing's Capuzzi conceded that a big negative of the Schwab-TD Ameritrade deal is that it would reduce choices for consumers.

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2019-11-25 11:51:00Z
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Uber stopped from operating in London - The - The Washington Post

Henry Nicholls Reuters A photo illustration shows the Uber app and a bus in London, Britain, June 25, 2018.

LONDON — London’s transport authorities on Monday announced they will not renew Uber’s license to operate in the British capital after thousands of trips were made with someone other than the booked driver.

In a statement, Transport for London (TfL) said that there were “several breaches that placed passengers and their safety at risk.”

Uber’s license expires at midnight on Monday. The company said that it will appeal the decision, and it can continue to operate until a final decision is made.

This is the second time in two years that transport authorities have rejected the ride-hailing app’s bid to renew its operating license in London, one of its largest European markets.

The ride-sharing app, which employs tens of thousands of drivers, is hugely popular with users in London — and unpopular with London’s iconic black cabbies.

Uber said it will appeal the decision and that, for it’s 3.5 million users in London and 45,000 drivers, it will be business as usual during that time. “We have fundamentally changed our business over the last 2 years, setting the standard for safety in the industry. TfL’s decision on our London licence is wrong and we will appeal,” the corporation tweeted.

In September 2017, TfL first dropped the bombshell that it was not going to renew Uber’s license amid safety concerns. The company successfully appealed that decision and was granted an extension.

TfL said that the company had made a number of improvements over the past year but said that one of the key issues was a change to Uber’s system that “allowed unauthorised drivers to upload their photos to other Uber driver accounts.” They said that this allowed at least 14,000 trips where passengers were picked up by someone other than the booked driver.

Sadiq Khan, the mayor of London, said in a statement: “I know this decision may be unpopular with Uber users but their safety is the paramount concern.”

“Regulations are there to keep Londoners safe, and fully complying with TfL’s strict standards is essential if private hire operators want a license to operate in London,” he said.

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2019-11-25 11:37:00Z
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Charles Schwab buying TD Ameritrade for $26B in all-stock deal - Fox Business

Charles Schwab Corp. confirmed the acquisition of TD Ameritrade as an all-stock deal for $26 billion.

Charles Schwab is acquiring TD Ameritrade in an all-stock transaction valued at $26 billion, the company announced Monday. TD Ameritrade shares were higher on the news.

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Ticker	Security	Last	Change	Change %
AMTD	TD AMERITRADE HOLDING	48.13	-0.25	-0.52%
SCHW	CHARLES SCHWAB	48.20	+0.17	+0.35%

Schwab will pay approximately 1.0837 Schwab shares for each TD Ameritrade share. The deal represents a 17 percent premium to Ameritrade's 30-day volume weighted average price. TD Shareholders will own about 13 percent of the combined company once the deal is complete.

The deal, which was first reported by FOX Business' Maria Bartiromo on Thursday, will create a financial-services behemoth with $5 trillion in assets under management, allowing Schwab to better compete with the likes of BlackRock. The firms generate a combined $17 billion of annual revenue and $8 billion of annual pre-tax profit.

The deal is expected to be 10 percent to 15 percent accretive to earnings and 15 percent to 20 percent accretive to operating cash earnings per share in year three.

"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,” Charles Schwab President and CEO Walt Bettinger said in a statement.

LOUIS VUITTON PARENT TO BUY LEGENDARY AMERICAN LUXURY BRAND

TD Ameritrade Chief Financial Officer Stephen Boyle will act as the interim president and CEO, helping the company with its fiscal year 2020 plan and integration with Schwab. Boyle will assume leadership effective immediately.

Following the close of the deal, TD Bank will have the opportunity to name two board members and TD Ameritrade will name a director.

The combined company's headquarters will be located in Westlake, Texas.

Outgoing TD Ameritrade CEO Tim Hockey previously acknowledged his firm's decision to adopt zero commissions -- as Schwab and rivals E-Trade and Fidelity have done -- would prompt speculation about mergers.

"We will take a look at anything that makes financial and strategic sense," he said last month, outlining the company's plans to make up for lost revenue of as much as $240 million a quarter from the new commission structure. "Scale is important. We have scale. We're very comfortable with our earnings power now, even in this new environment."

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Schwab said in October that eliminating its $4.95-per-trade commission would trim quarterly revenue by $90 million to $100 million, or about 3 percent to 4 percent of the total.

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2019-11-25 11:06:53Z
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Charles Schwab to buy TD Ameritrade in a $26 billion all-stock deal - CNBC

Charles Schwab on Monday announced plans to buy discount brokerage rival TD Ameritrade in an all-stock deal valued at $26 billion.

As part of the agreement, Ameritrade stockholders will receive 1.0837 Schwab shares for every share held. The deal is expected to close in the second half of 2020.

Shares of TD Ameritrade ticked 1% lower to $47.82 in premarket trading, while Schwab shares fell 2.7% to $46.90.

The merging of the two biggest publicly traded discount brokers will create a mammoth with more than $5 trillion in client assets, $3.8 trillion from Schwab and $1.3 trillion from TD Ameritrade. The combined company will serve more than 24 million clients. 

"We believe the combination of our two great companies positions us to be competing and winning in the investment services business for the long run—the very long run," said Charles Schwab president and CEO Walter Bettinger. 

The integration of the two firms is expected to take between 18 and 36 months after the deal is closed. The combined company's headquarters will relocate to Schwab's new campus in Westlake, Texas.

The deal will create "a Goliath in Wealth Management," Wells Fargo senior analyst Mike Mayo said in a note to clients on Thursday, when talks of the merger were by CNBC's Becky Quick.

More consolidation in the brokerage industry is expected given the massive amount of disruption that has taken place, with all the major brokers dropping commission fees for trading in recent months. Schwab was the first of the major players to make the move, eliminating commissions in . Schwab's competitors, including Fidelity and TD Ameritrade, were quick to follow.

Andrew Burton | Bloomberg | Getty Images

After dropping commissions, Schwab and TD Ameritrade's stocks were under pressure as investors worried that the lost commission revenue would pressure margins; however, Schwab proved its free trading is paying off in terms of new client accounts. Schwab has a market value of $57.5 billion and TD Ameritrade has a $22.4 billion market cap.

The advantage to the Schwab-TD Ameritrade deal is the brokerage giant will be able to cut costs, stream new revenue opportunities and improve the platform for clients, said JMP Securities analyst Devin Ryan. Given the high amount of overlapping back-office operations and vendor costs, Stephen Biggar, Argus Research Director of Financial Institutions Research, expects to see about 60% of TD Ameritrade's costs removed following the sale.

TD Ameritrade CEO Tim Hockey previously announced he would step down in February 2020. The companies said on Monday they will suspend the CEO search and named TD Ameritrade Chief Financial Officer Stephen Boyle as TD Ameritrade's interim president and CEO.

This particular deal came as a shock to analysts on Wall Street, who pegged E-Trade as the most likely acquisition target among the smaller brokers. Shares of E-Trade ticked about 1% lower in premarket trading. 

The deal will likely pressure smaller brokers like Interactive Brokers, as well as Silicon Valley start-up Robinhood who kick-started free stock trading in 2013.

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2019-11-25 11:04:00Z
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Uber loses its London license as regulator cites a ‘pattern of failures’ - The Verge

London’s transport regulator, Transport for London (TfL), has refused to grant Uber a new license in the city. TfL had been extending Uber’s license to operate in London in recent months, after the ride sharing company lost its license in 2017. TfL originally revoked Uber’s license citing Uber’s approach to serious criminal offences, medical certificates, disclosure and barring checks, and the company’s use of its Greyball software that TfL said blocked regulatory bodies from gaining full access to Uber’s app for law enforcement duties.

TfL now says it has identified a “pattern of failures” by Uber, including breaches that placed passengers at risk. “Despite addressing some of these issues, TfL does not have confidence that similar issues will not reoccur in the future, which has led it to conclude that the company is not fit and proper at this time,” says a TfL spokesperson. One particular issue that was identified was a change in Uber’s system that “allowed unauthorised drivers to upload their photos to other Uber driver accounts.”

This enabled other Uber drivers to pick up passengers as if they were booked with the original driver, and TfL says this occurred during at least 14,000 trips. “This means all the journeys were uninsured and some passenger journeys took place with unlicensed drivers, one of which had previously had their licence revoked by TfL,” says a TfL spokesperson. A similar issue allowed suspended drivers to create an Uber account and take passengers on trips.

London’s mayor, Sadiq Khan, also backed TfL’s decision today. I know this decision may be unpopular with Uber users but their safety is the paramount concern,” said Khan in a statement on Twitter. “Regulations are there to keep Londoners safe, and fully complying with TfL’s strict standards is essential if private hire operators want a license to operate in London.”

TfL is now revoking Uber’s license in London, and the firm will have 21 days to appeal the decision. Much like last time, Uber will be able to continue to operate in the city throughout the appeal, which will involve the ride sharing company appealing to a magistrates court to demonstrate its app is safe for passengers. “If they do appeal, Uber can continue to operate and we will closely scrutinize the company to ensure the management has robust controls in place to ensure safety is not compromised during any changes to the app,” explains a TfL spokesperson.

Uber previously won an appeal to continue operating in London, and was granted a probationary 15-month license last year. This license expired in September, and TfL provided a two-month extension until today. Uber is planning to appeal this latest ban. “TfL’s decision not to renew Uber’s licence in London is extraordinary and wrong,” says Jamie Heywood, Uber’s regional general manager for Northern & Eastern Europe. “We have fundamentally changed our business over the last two years and are setting the standard on safety. TfL found us to be a fit and proper operator just two months ago, and we continue to go above and beyond.”

Update November 25th, 5:50AM ET: Article updated with comment from Uber.

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2019-11-25 10:39:03Z
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Uber stripped of its London license in huge blow to the ride-hailing giant - CNBC

A man checks his smartphone while standing among illuminated screens bearing the Uber logo.

Chris Ratcliffe | Bloomberg | Getty Images

Uber has been stripped of its license to operate in London, as the local transport regulator said it was "not fit and proper."

Transport for London said Monday that it would not renew the San Francisco-based ride-hailing giant operator's license, citing a "pattern of failures" that had "placed passenger safety and security at risk."

TfL had first suspended Uber's license back in 2017, flagging concerns with the company's approach to safety. Following that initial move, Uber had twice been granted a temporary license to continue operating in the city — the first, a 15-month reprieve issued by a judge last year, and the second, a two-month permit granted by TfL in September.

"Uber has made a number of positive changes and improvements to its culture, leadership and systems in the period since the Chief Magistrate granted it a licence in June 2018," TfL said in a statement Monday. "This includes interacting with TfL in a transparent and productive manner."

"However, TfL has identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk," the regulator continued. "Despite addressing some of these issues, TfL does not have confidence that similar issues will not reoccur in the future, which has led it to conclude that the company is not fit and proper at this time."

Uber now has 21 days to appeal the decision and will be allowed to operate during that time. In response to TfL's move, the company said it intended to appeal.

"TfL's decision not to renew Uber's licence in London is extraordinary and wrong, and we will appeal," Jamie Heywood, Uber's regional general manager for Northern and Eastern Europe, said in a statement. "We have fundamentally changed our business over the last two years and are setting the standard on safety. TfL found us to be a fit and proper operator just two months ago, and we continue to go above and beyond."

"On behalf of the 3.5 million riders and 45,000 licensed drivers who depend on Uber in London, we will continue to operate as normal and will do everything we can to work with TfL to resolve this situation."

London is Uber's biggest European market and a key driver of its revenues beyond the U.S. It's faced increased competition in the U.K. capital from the likes of Estonian start-up Bolt and French rival Kapten.

In its announcement, London's transport authority said it held issue with a change made to Uber's systems that allowed unauthorized drivers to upload their photos to other Uber driver accounts. According to TfL, this allowed them to pick up riders as though they were the booked driver.

"This means all the journeys were uninsured and some passenger journeys took place with unlicensed drivers, one of which had previously had their licence revoked by TfL," the regulator said.

This is a breaking news story. Please check back for more updates.

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2019-11-25 10:03:00Z
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LVMH scoops up Tiffany for $16.2 billion - CNN

The two companies announced Monday that LVMH will buy the Manhattan jeweler, famous for its little blue boxes and Fifth Avenue flagship store. The French luxury group will pay $135 per share, valuing Tiffany at about $16.2 billion.

A deal had been expected for weeks. Tiffany and LVMH both confirmed in October that they were in talks to combine after Paris-based LVMH reached out with an unsolicited initial offer of $14.5 billion. That was already a premium over Tiffany's stock price at the time.

The deal is one of the largest in the history of the luxury sector and in the career of LVMH CEO Bernard Arnault, Europe's richest man.

LVMH is the world's biggest luxury group and home to 75 different brands, including Christian Dior and Bulgari. Analysts have been bullish on its latest deal, saying that Tiffany is a good acquisition target because of its strong global brand.

"A takeover of Tiffany could make a lot of sense," analysts at Bernstein wrote in a research note last month. While Tiffany is one of the world's best-known luxury brands, analysts say it still has room to grow, particularly in jewelry and watches. And LVMH's deep pockets could help Tiffany turn around after a rocky few years, and fuel its effort to better connect with millennial consumers.

In a statement Monday, Tiffany chairman Roger N. Farah said the deal would give the company "an exciting path forward with a group that appreciates and will invest in Tiffany's unique assets and strong human capital."

The deal would also bolster LVMH's jewelry and watch lineup, which already includes legacy brands such as Hublot and TAG Heuer. It would also boost the French company's presence in the United States, which accounts for about a quarter of its revenue.

LVMH has for years been the top seller of high-end goods, according to a Deloitte analysis published this year. But sales in its jewelery and watch division make up only 9% of the company's total revenue.

Tiffany, a 182-year-old jeweler, employs 14,000 people and operates 300 stores around the globe. In recent years, however, its sales have slumped.

LVMH, meanwhile, has enjoyed much more success among millennials, attracting attention from prominent influencers including Kylie Jenner and Cardi B. It owns major fashion houses such as Fendi and Louis Vuitton, as well as beverage brands Moet and Hennessy. Earlier this year, the conglomerate acquired Rihanna's Fenty and Fenty Beauty fashion and cosmetics lines, which have enjoyed unique success marketing to a diverse swath of young women.

Tiffany and LVMH said Monday that the deal is expected to close in the middle of 2020.

CNN Business' Clare Duffy contributed to this report.

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2019-11-25 09:36:00Z
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