By C Nivedita

Nov 25 (Reuters) - Charles Schwab Corp agreed on Monday to buy TD Ameritrade Holding Corp in an all-stock deal valued at $26 billion, creating a brokerage giant in a market that has been ravaged by price wars.

The acquisition will shake up the retail brokerage industry, creating a company with $5 trillion in assets under management and putting smaller rivals under pressure to scout for tie-ups.

The discount brokerage business is under pressure from new, nimbler startups that are gaining market share by eliminating commissions on stock trades.

Last month, Schwab became the first major brokerage to eliminate commissions, a move followed by others including Fidelity Investments, E*Trade Financial Corp and TD Ameritrade.

"In a low, or no fees world ... the pressure will be on other financial services rivals to try to keep up, or to gain further scale themselves," Bankrate.com senior economic analyst Mark Hamrick said.

While the deal could give Schwab an edge