Toronto-Dominion Bank

(TD) - Get Report

confirmed Tuesday that it is in talks to merge its TD Waterhouse discount brokerage unit with

E*Trade Financial

(ET) - Get Report

.

In a sparsely worded press release, both TD Bank and E*Trade said they are holding discussions with regard to a possible transaction. "There can be no assurances that the discussions will lead to an agreement, nor that such an agreement, if reached, would be consummated," the two firms said in separate press releases.

The news came after the

Globe and Mail

newspaper said the firms were in final negotiations to join forces.

Citing sources familiar with the talks, the paper said Toronto-Dominion Bank would hold a 40% to 50% stake in the combined business, making it the biggest shareholder. Although E*Trade is the larger of the two firms, its shares are widely held by mutual and pension funds. The paper said TD would increase its interest in the firm over time, but E*Trade's management would run the merged company.

The transaction has an implied value of about 8 billion Canadian dollars, or $6.3 billion, if TD Bank secures a 40% stake, the paper said, adding that a proposed deal could be presented to the boards of both firms next week.

For months now, speculation has been swirling that TD Bank would sell its brokerage unit to a U.S. rival. According to the paper, TD had been in talks with

AmeriTrade

(AMTD) - Get Report

and

Charles Schwab

( SCH), although those negotiations broke down over strategy and price.