New York (CNN Business) Two of the leaders of the online brokerage industry are merging. Charles Schwab agreed to buy TD Ameritrade for $26 billion, the companies announced Monday.

"We have long respected TD Ameritrade," said Schwab CEO Walt Bettinger, in a statement. "With this transaction, we will capitalize on the unique opportunity to build a firm with the soul of a challenger and the resources of a large financial services institution."

The combined company would be a brokerage behemoth. It will have 24 million customer accounts with more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25 billion.

The deal comes a month after both companies announced plans to eliminate commissions for most online trades — a move that is great for their customers but left analysts and investors in these stocks wondering how Schwab and TD Ameritrade would make up for the loss in revenue

The traditional discount brokers have all faced intense competition from Robinhood, a trading app popular with millennials that launched a few years ago with a no commission business model.

TD Ameritrade CEO Tim Hockey hinted that his company could be for sale in an interview with CNN Business last month after the company reported earnings.

"We will always take a look at something that makes strategic sense," Hockey said.

The fact that Hockey announced in July that he plans to step down once a successor was found only added to the rumors that TD Ameritrade was on the shopping block. TD Ameritrade said Monday it would suspend its CEO search.

"On the heels of all the zero-commission announcements, this was the inevitable next shoe to drop," said Bill Capuzzi, CEO of Apex Clearing, a custodian firm that holds securities for brokerages.

Capuzzi said the merger makes "a lot of sense," because the overlap in their respective businesses could save the combined company a huge amount of money. TD Ameritrade and Schwab estimate the deal will save the combined company up to $2 billion, some of which will be realized by layoffs.

Schwab SCHW Shares offell slightly while TD Ameritrade's stock shot up 3% in premarket trading. E-Trade's shares fell more than 1%.

E-Trade could be the odd man out in a game of merger musical chairs. There has been on-and-off chatter for several years that E-Trade could be a good fit for Schwab.

But Kristi Ross, the co-CEO of financial tech firm tastytrade, which is the parent company of new online broker dough, thinks E-Trade could be a takeover target as well.

"We will definitely see more consolidation in the industry. It's a natural next step given more competition and the price disruption," said Ross, who is also the former CFO of thinkorswim, an online options trading firm which was bought by TD Ameritrade for more than $600 million in 2009.

For its part, Fidelity did not seem concerned by the fact that Schwab will be getting bigger.

"Acquisitions of this size can be long, complex, and unsettling, so while our public competitors are busy working on a massive integration of technologies and services, Fidelity will remain focused on investing in our platform and delivering an exceptional client experience, including unmatched value," said Fidelity's Personal Investing president Kathy Murphy in a statement to CNN Business.

But will a Schwab-TD Ameritrade merger get by federal regulators?

"This deal may face somewhat significant antitrust hurdles, depending on how the competitive market is viewed by relevant authorities," said KBW analyst Kyle Voigt said in a report Thursday morning.

JPMorgan Chase JPM Bank of America BAC It would all depend on what the government decides are the most pertinent competitors, Voigt said. Will officials just look at other online brokers like E-Trade and Fidelity or also consider big Wall Street firms likeandas rivals?

Apex Clearing's Capuzzi conceded that a big negative of the Schwab-TD Ameritrade deal is that it would reduce choices for consumers.