(Reuters) – London-listed trading platform IG laid out a planned $1 billion cash and shares deal to buy U.S. peer tastytrade on Thursday, taking a step into North American markets after a stellar year for the new breed of retail investment brokerages.
Coronavirus-driven volatility has driven a surge in revenue and profit for IG and UK rivals including CMC Markets and Plus500, while in the United States making a major name out of Robinhood.com and its easy app-based trading.
Tastytrade shareholders will receive $300 million in cash and 61 million IG shares, valued at $700 million, IG said on Thursday, making it by far the company’s biggest ever acquisition.
It said Tastytrade had over 105,000 active trading accounts and some 900,000 unique registrations.
Robinhood said last May it had 13 million user accounts and was valued at $11.2 billion as of December, after a year which has seen herd behaviour by traders on the app cited as a factor in surges in the value of a number of U.S. companies.
Tastytrade’s senior leadership will stay on after the merger, which the two companies hope to complete in the first quarter of the next financial year.
“While our long-term goal has always been to go global, we waited almost 10 years until we found the right partner and perfect match,” Co-CEO of tastytrade Tom Sosnoff said.
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