TD Bank Financial Group has completed the sale of TD Waterhouse USA to Ameritrade Holding Corp., creating the combined company, TD Ameritrade.

In connection with the transaction, TD Waterhouse Canada has acquired 100% of Ameritrade’s Canadian brokerage operations.

“For TD Bank Financial Group shareholders this transaction has translated TD Waterhouse USA into a strong ownership position in one of the leading players in the online brokerage marketplace. In addition, TD Ameritrade complements TD Banknorth’s personal and commercial banking operations and strengthens the TD brand in the United States.” said Ed Clark, president and CEO, TD Bank, in a release.

“The new TD Ameritrade has emerged as a clear industry leader offering clients a powerful combination of online services, an extensive branch system and a network of independent investment advisors,” Clark added.

TD Bank’s current ownership position in TD Ameritrade stands at 32.5%. TD said it will realize a gain from this transaction of approximately $1.5 billion (US$1.3 billion) net of $138 million tax recorded in the fourth quarter of 2005.

Under the stockholders agreement in connection with the deal, TD agreed to commence a cash tender offer at a price of not less than US$16 per share, for approximately 7.4% of the outstanding Ameritrade shares.

“As we discussed following shareholder approval of the transaction earlier this month, at the time the transaction was initiated we wanted to add value to the deal by agreeing to offer to buy shares at what was a premium to market at that time. Clearly, the market has been supportive of this transaction as witnessed by the increase in the Ameritrade stock price. As a result, a tender offer at $16 per share does not add value now,” noted Clark.

“We plan on fulfilling our legal obligation to complete the tender offer relatively soon, after which we would be in a position to buy shares in the marketplace. In order to retain a fifth seat on the TD Ameritrade board we are required to own 37.5% of TD Ameritrade one year following the completion of the transaction. Assuming appropriate market conditions, our preference would be to reach this level within a year or so.”