JPMorgan Chase & Co. announced today it has signed a definitive agreement to sell BrownCo, its online deep discount brokerage business, to E*TRADE FINANCIAL for a cash purchase price of $1.6 billion. JPMorgan Chase expects to recognize an after-tax gain of approximately $700 million. The sale is subject to normal regulatory approvals and is expected to close by year-end 2005.
Jes Staley, head of JPMorgan Asset & Wealth Management, said, "We are proud of the business the people of BrownCo have built. It has been a valuable and profitable asset for our firm. We have decided, however, that it is in the best long-term interests of our shareholders and BrownCo's customers that we sell the unit to E*TRADE FINANCIAL, a recognized industry leader in online brokerage, and that our Asset & Wealth Management group focus on its core investment management and wealth advisory activities."
"BrownCo is a premier brokerage asset and an ideal strategic fit for E*TRADE FINANCIAL, accelerating the build out of our business model in this fast-consolidating industry," said Mitchell H. Caplan, Chief Executive Officer, E*TRADE FINANCIAL.
BrownCo has approximately 200,000 active accounts, 28,000 daily average revenue trades, $3 billion in margin accounts, $3.4 billion in customer credits and $29 billion in client assets. The business provides online deep discount brokerage services and focuses on the active trader segment of the market.