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(Bloomberg) — Charles Schwab Corp. agreed to buy TD Ameritrade Holding Corp. in a multibillion-dollar deal that will reshape the retail brokerage business.

Schwab agreed to acquire TD Ameritrade in an all-stock transaction the companies say is valued at $26 billion, or about $48.50 per share — a 19% premium based on Schwab's share price as of close on Nov. 20. TD Ameritrade stockholders will receive 1.0837 Schwab shares for each TD Ameritrade share.

The equity value of the deal is $28.3 billion based on Schwab's closing price of $48.20 on Nov. 22.

Announcement of the deal comes after news of an acquisition broke on Thursday, sending up shares of both firms. Schwab, America's original discount broker, will now have even more sway over the sector it pioneered nearly a half-century ago.

The tie-up creates a mega-firm with $5 trillion in assets — a Goliath that may attract the attention of antitrust regulators, analysts say. Smaller brokerages like E*Trade Financial Corp. will have to contend with a much more formidable competitor.

The combined firm will relocate its headquarters to to Schwab's new campus in Westlake, Texas, according to Monday's statement, though Schwab's San Francisco operations will remain a sizable hub.

Soaring Shares

Shares of TD Ameritrade, an Omaha-based brokerage that's partly owned by Toronto-Dominion Bank, fell less than 1% on Friday after surging 17% the day before as investors learned of a possible deal. Schwab rose less than 1% Friday, after gaining 7.3% the prior day, as investors waited for confirmation.

TD Bank, which holds 43% of TD Ameritrade, will own roughly 13% of the new business. Its voting stake will be limited to 9.9%, with the rest of its position in a non-voting class of stock. The Canadian lender will have two new seats on the combined firm's board, while TD Ameritrade will name a single director.

As a result of the deal, Schwab will see its business add 12 million client accounts, $1.3 trillion in assets, and roughly $5 billion a year in revenue.

Walt Bettinger, Schwab's chief executive officer, said in the statement that the new firm will have "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."

Schwab's last month eliminated commissions for U.S. stock trading, forcing other brokerages to follow suit and sweeping away an important revenue stream. Analysts speculated that online brokerages might have to cut deals to survive the increased industry pressure.

TD Ameritrade has relied more on commissions than some competitors, drawing 36% of its net revenue from commissions in 2018, compared to 7% at Schwab.

Founder Charles Schwab hinted he was open to dealmaking in an interview with Bloomberg Radio in October.

"I don't know whether we'll be successful in that pursuit, but in the industry you're going to see more consolidation, more firms getting together," he said. "You just have to have that scale and volume."

If the deal goes through, the combined company will have unparalleled clout as top custody service providers to independent financial advisers. That may give authorities pause, Keefe, Bruyette & Woods analyst Kyle Voigt wrote Thursday. He estimates Schwab has about a 50% market share of registered investment adviser custody assets, while TD Ameritrade may have as much as 20%.

The acquisition comes after TD Ameritrade announced in July that CEO Tim Hockey would leave early next year. Hockey denied at the time that his departure had anything to do with a potential deal.

Credit Suisse Securities was Schwab's financial adviser. PJT Partners and Sander O'Neill Partners were financial advisers to TD Ameritrade's board. Davis Polk & Wardwell and Wachtell Lipton Rosen & Katz were legal advisers to Schwab and TD Ameritrade, respectively.