UBS this week said it is acquiring Charles Schwab SoundView Capital Markets, the company's capital markets group, for $265 million cash. UBS says it expects to become one of the top traders in Nasdaq securities through this deal. UBS will integrate it into the equities business of its investment bank if the deal is closed, which is expected in the fourth quarter.
UBS is buying a group that includes equities trading and sales, including a third party execution business. UBS, already among the top three largest of NYSE-listed securities, plans to use what it calls Schwab's "state-of-the-art" NASDAQ trading system to move up in that market. The business handles more than 200 million shares a day in trade volume and makes a market in over 11,000 stocks.
As part of the sale, UBS would get a multi-year execution service agreement to handle Schwab's equities and listed options orders.
The deal will "further our goal of becoming a premier provider of services to private clients around the world," said John Costas, chairman and CEO of UBS Investment Bank, in a statement.
Schwab, which recently fired CEO David Pottruck and moved Chairman Charles R. Schwab back into the CEO role, described the move as part of a decision to focus more closely on its core business of individual investors and financial advisers working with them.
Last week, Schwab announced cuts in commission rates for active traders on its CyberTrader direct-access subsidiary.