TD Ameritrade Holding Corp. will buy Scottrade Financial Services Inc. in a $4 billion deal, combining two leaders in the retail market for the buying and selling of stocks as the landscape for stock picking continues to lose favor to index investing.

Both companies helped bring low-cost stock trading to small-time investors and away from the exclusive world of brokerage that existed before.

The combined company will have 600,000 average client trades a day and $944 billion in client assets.

The deal will happen in two parts. First, TD Bank Group, which owns a large stake in TD Ameritrade, will purchase Scottrade Bank from Scottrade Financial Services for $1.3 billion in cash. TD Bank Group will also purchase $400 million in new common equity from TD Ameritrade in connection with the deal. Then, immediately following that acquisition, TD Ameritrade will acquire Scottrade Financial Services Inc. for $4 billion, or $2.7 billion after the proceeds from the sale of Scottrade Bank.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

October 24, 2016 06:55 ET (10:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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