E-Trade Financial Corp. has agreed to pay $1.6 billion in cash to acquire BrownCo, JPMorgan 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 currently handles more than 130,000 daily average revenue trades; 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.