The brokerage wars are heating up.

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Charles Schwab is buying Ameritrade for $26 billion, sources tell FOX Business' Maria Bartiromo exclusively. TD Ameritrade shares soared on the news while Charles Schwab was higher.

Ticker Security Last Change Change % SCHW CHARLES SCHWAB 34.94 +0.58 +1.69% AMTD TD AMERITRADE HOLDING 37.82 +0.67 +1.80%

The deal, expected to be announced this morning, will allow Charles Schwab to better compete with the likes of BlackRock. The combined firm will be run by Schwab CEO Walter Bettinger, and TD Ameritrade's chief financial officer, Steve Boyle, will lead the target company until the deal is completed.

TD Ameritrade's current CEO Tim Hockey, who announced in July that he would leave by the end of February, has acknowledged that his firm's decision to adopt zero commissions -- as Schwab and rivals E-Trade and Fidelity have done -- would prompt speculation about mergers.

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"We will take a look at anything that makes financial and strategic sense," he said last month, outlining the company's plans to make up for lost revenue of as much as $240 million a quarter from the new commission structure. "Scale is important. We have scale. We're very comfortable with our earnings power now, even in this new environment."

Ticker Security Last Change Change % ETFC E*TRADE GROUP (E*TRADE BANK AG) 48.63 +0.42 +0.87% IBKR INTERACTIVE BROKERS GROUP 47.47 +0.57 +1.22%

Schwab said in October that eliminating its $4.95-per-trade commission would trim quarterly revenue by $90 million to $100 million, or about 3 percent to 4 percent of the total.

The firm's stock has risen 7.8 percent this year, while TD Ameritrade's has fallen 15.5 percent. The broader S&P 500 gained 24 percent in the same period.

WATCH: Schwab deal means trouble for smaller brokerage firms: Money manager:

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TD Ameritrade, which began as First Omaha Securities, was founded by Joe Ricketts in1975. In 1988, it became the first firm to let clients make trades by touch-tone phone, then went public three years later. TD bought Scottrade in a $4 billion cash-and-stock deal in 2016, tying up two major players in the industry.