(30 September 2005 – USA) E*Trade Financial will make its second acquisition in as many months with the online brokerage firm set to snap up rival BrownCo from JPMorgan Chase for a cash deal of US$1.6 billion.BrownCo has 200,000 active traders on its books and has the second highest average account balance at more than US$145,000 per account.
E*Trade, which is based in New York, said the deal would generate pre-tax savings of around US$145 million, US$91 million in cost savings, and US$63 million in revenue.
E*Trade chief executive Mitchell Caplan said BrownCo was an ideal strategic fit and would accelerate the firm’s growth in an industry that is quickly consolidating.
E*Trade bought online brokerage firm HarrisDirect from Canada’s BMO Financial Group for US$700 million in August. It had earlier tried to purchase Ameritrade which later bought TD Waterhouse from Canada’s Toronto Dominion Bank.