New York ? Rejecting a takeover offer from E-Trade Financial Corp., Ameritrade Holding Corp. on Wednesday said it instead would acquire rival online brokerage TD Waterhouse from Toronto-Dominion Bank.

The merger comes as the online brokerage industry is engaged in intense battles for business, with rivals slashing trading costs to draw customers and generate trading.

The merged brokerage would have nearly 6 million customer accounts, about $1.8 billion of annual revenue and more than $200 billion in client assets.

The overall value of the deal was not disclosed.

Ameritrade Chief Executive Joe Moglia would become CEO of the combined entity.

E-Trade earlier this month reportedly sweetened its bid to acquire Ameritrade, offering a 49.5 percent stake in the combined company and about $2 billion in cash. In May, Ameritrade rejected an offer from E-Trade for a 47.5 percent stake in the combined company plus $1.5 billion.