E-Trade buys J.P. Morgan's online brokerage for $1.6B

The deal brings $29B in new assets to E-Trade

By Stacy Cowley

September 29, 2005 12:00 PM ET

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IDG News Service - E-Trade Financial Corp. has agreed to pay $1.6 billion in cash to acquire BrownCo, J.P. Morgan Chase & Co.'s online brokerage.
BrownCo's 200,000 customers are high-net-worth individuals carrying average account balances of $145,000 each, according to the companies. The deal will bring $29 billion in additional assets to E-Trade, which expects its customer assets to total $160 billion after the acquisition's close. E-Trade current handles an average of more than 130,000 revenue-generating trades each day. BrownCo will bring in another 28,000.
New York-based E-Trade has a customer base of nearly 4.3 million. The company has been a buyer in the rapidly consolidating online brokerage market. In August, it agreed to purchase the U.S. online brokerage operations of Harrisdirect from BMO Financial Group, for $700 million in cash.
E-Trade's main rival is Ameritrade Holding Corp., which fended off a takeover bid from E-Trade earlier this year. Ameritrade then went on to strike a deal to buy TD Waterhouse in an all-stock deal valued at $2.9 billion.

Reprinted with permission from

IDG.net
Story copyright 2009 International Data Group. All rights reserved.

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