The $4 billion purchase of Scottrade will bring 3 million new accounts to TD Ameritrade (AMTD - Get Report) along with a sizeable branch network, creating a company with nearly $1 trillion in client assets.

"This transaction fuses together our organizations in a highly compelling way," TD Ameritrade CEO Tim Hockey said on a call with analysts and investors Monday. "Scale and speed are important to our strategy," he added, and "the acquisition of Scottrade directly addresses both."

Under the deal's complex structure, TD Ameritrade (AMTD - Get Report)  shareholder Toronto-Dominion Bank (TD - Get Report) will pay $1.3 billion for Scottrade Bank, which is equivalent to its tangible book value. TD Ameritrade will acquire the rest of Scottrade Financial Services for a net $2.7 billion, of which $1 billion will be in Omaha, Neb.-based TD Ameritrade stock.

"This transaction fits the playbook for M&A within the discount brokerage market as it highlights the high level of expense synergies, at least 60% in this case, and the potential benefits of scale and revenue synergy opportunities through an expanded set of product offerings," Jefferies LLC analyst Daniel Fannon said in a note to clients.

Buying Scottrade will quadruple TD Ameritrade's branch network and generate savings of as much as $450 million in technology, back office and advertising spending, Hockey said.

"We've done this before," the CEO added. "While it's been a few years since our last big deal, we have a long history of delivering shareholder value as an industry consolidator."

TD Ameritrade is issuing another $400 million of new shares to TD Bank to raise cash for the deal, a move that will leave TD Bank with a stake of 41.4% in its brokerage affiliate, down from 42.35% at present, a spokeswoman said. TD Ameritrade will also take on $400 million of new debt.

Once the deal is closed, which the companies expect will happen by Sept. 20, 2017, Scottrade Founder and CEO Rodger Riney will be appointed to the TD Ameritrade board. The deal is likely to be 7% to 12% dilutive in its first year.

Beyond Scottrade's 450 locations in midcap markets throughout the U.S., "TD Ameritrade's more advanced product offering in derivatives, investor education and mobile trading allow for a broader set of products and technologies to be marketed to Scottrade's customer base," Fannon, the Jefferies analyst, said.

The purchase doesn't affect TD Ameritrade's outlook for future M&A activity, according to Hockey.

"We have a long history of identifying the right opportunities at the right time for this company," he said. "We've acquired for scale. We've acquired for capability. We've acquired for strategic partnership and expertise, and we are proud to add Scottrade to that list.

The transaction is the latest of several recent deals between online brokers, including E*Trade Financial Corp.'s $725 million purchase last month of OptionsHouse owner Aperture New Holdings Inc. At one point, TD Ameritrade was rumored to be a potential buyer for E*Trade, but the deal never went through.

TD Ameritrade fell 2.7% Monday to $36.26 a share, following the deal and the disclosure of fourth-quarter earnings that trailed analysts' estimates. Income of 35 cents a share compared with projections of 38 cents a share.

Advisers on the deal include Joel Fleck and Tom Vandever of Barclays Capital Inc. and Edward Herlihy, Matthew Guest, Jeannemarie O'Brien, Josh Holmes, Jake Kling, Minsun Lee and Bert Ma of law firm Wachtell, Lipton, Rosen & Katz for TD Ameritrade.

Advisers for Scottrade were Goldman, Sachs & Co. bankers including Phil Labbe and Ken Coquillette and law firm Sullivan & Cromwell LLP for Scottrade. On the Sullivan & Cromwell team were Mark J. Menting, Ronald E. Creamer Jr. and special counsel Rebecca S. Coccaro, Stephen H. Meyer and Andrea R. Tokheim. Lee Meyerson of Simpson Thacher & Bartlett LLP provided financial counsel to Scottrade.

David Marcus and Laura Board contributed to this report.