Canadian banking giant TD Bank Group (TSE:TD) has announced its intention to sell its entire equity investment in The Charles Schwab Corporation (NYSE:SCHW) through a registered offering and share repurchase by Schwab. TD will continue to have a business relationship with Schwab through the Insured Deposit Account (IDA) Agreement.

TD currently holds 184.7 million shares of Schwab’s common stock, representing 10.1% economic ownership. (At SCHW’s current price of $80.90, the stake has a market value of USD $14.9 billion). Schwab has agreed to repurchase US$1.5 billion of its shares from TD conditional on completion of the offering.

TD Bank originally acquired the stake in Schwab – becoming in the process Schwab’s largest outside shareholder – as part of Schwab’s 2020 acquisition of TD Ameritrade, TD’s online brokerage arm.

A preliminary prospectus supplement relating to the secondary offering of Schwab shares held by TD will be filed by Schwab with the U.S. Securities and Exchange Commission. TD Securities and Goldman Sachs will be acting as joint bookrunning managers on the offering.

“As part of our strategic review, we have been evaluating capital allocation and have made the decision to exit our Schwab investment. We are very pleased with the strong return we are generating on the Schwab shares we acquired in 2020,” said Raymond Chun, Group President and Chief Executive Officer, TD Bank Group.

“We are confident in TD’s growth opportunities and long-term potential, and we plan to use C$8 billion of the proceeds to repurchase our stock. We will invest the balance of the proceeds in our businesses to further support our customers and clients, drive performance and accelerate organic growth.”