The online discount broking giant Charles Schwab has revealed plans to buy its rival TD Ameritrade in an all-stock deal worth $26 billion.

The marriage of the two largest public discount brokers will spawn a behemoth, which will serve more  than 24 million clients and have assets of more than $5 trillion.

READ: FTSE 100 holding onto gains, Tesla and TD Ameritrade lead Nasdaq to new highs

According to the agreement, Ameritrade shareholders will receive 1.0837 Schwab shares for every share held, a 17% premium over the stock’s 30-day average price before the deal was made public.

Investors on both sides of the deal welcomed the announcement, sending Schwab shares up 1.25% to $48.79 in mid-morning trade while TD Ameritrade shares popped by 5.8% to hit $50.90.

The news pushed up Schwab’s market cap to $62.5 billion and TD Ameritrade’s to $27.57 billion.

“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 advisers,” said Schwab CEO Walt Bettinger in a statement. “Together, we share a passion for breaking down barriers for investors and advisers through a combination of low cost, great service and technology.”

The deal is set to close in the second half of 2020 and its integration is expected to take 18 months to 36 months.

In the wake of its announcement, TD Ameritrade said it is scrapping its search for a new CEO, and tapping its CFO Stephen Boyle to lead the integration with Schwab. The new company will be based out of Schwab’s headquarters in Westlake, Texas.

Shareholders of Schwab will control 69% of the combined company while TD Ameritrade’s stakeholders will own 18% of it.

Contact Ellen at ellen@proactiveinvestors.com