Charles Schwab’s $1 bn bid for Chicago-based optionsXpress indicates that the US’ largest independent brokerage plans to build a sophisticated multi-product platform for active individual investors and independent traders.
The deal, announced by both companies yesterday, will add optionXpress’s 380,000 active individual investor options traders and $7.8 bn in client assets to Schwab’s 8 mn client accounts and $1.6 tn in assets. More importantly, it will add trading tools, analytics and education across equities, options and futures trading platforms, in hopes of increasing options trading among Schwab’s existing clients.
‘Options investors at Schwab tend to be among the larger, more active and longer-standing of our client relationships,’ says Walt Bettinger, Schwab’s president and CEO, in a statement.
‘The combination of optionsXpress and Schwab will offer active investors an unparalleled level of service and platform capabilities. OptionsXpress’ industry-leading and award-winning client tools will be well received by our existing active investor clients, who are increasingly using options and other trading strategies as a key part of their total approach to investing,’
‘This combination of capabilities allows optionsXpress to bring our leading-edge trading and analytical technologies to one of the largest and premier brokerages in the world,’ says David Fisher, optionsXpress’ CEO. ‘The union of our brands marks the beginning of a new era of capabilities and services focused on the retail investor. OptionsXpress and Schwab share a passion for innovation and championing the self-directed investor, and together we will leverage our combined strengths to unlock meaningful value for customers and stockholders.’
‘We launched optionsXpress in 2001 with the vision of making options and futures trading more accessible for self-directed retail investors,’ comments James grey, founder and chairman of the board of optionsXpress. ‘After 10 years of successfully empowering hundreds of thousands of customers, we are excited to bring our experience with these products to a much larger audience.’
Schwab said it expects to generate $20 mn in synergies through cost reductions and an additional $60 mn in revenue synergies, while absorbing $55 mn in restructuring and merger-related charges.