The consolidation of the European online brokerage industry continues to gain momentum with the acquisition by Germany's Direkt Anlage Bank (DAB) of Self Trade of France. The combined business will have almost 325,000 customers and EUR12.5 bn of assets under management.
Germany's big three brokers are in a race to expand outside their domestic market and build pan-European businesses to compete with US rivals. DAB's move has turned attention on Germany's second-largest sharedealing operation, Consors, whose shares slumped eight per cent on the news amid fears that the company will be forced to overpay for a UK acquisition in order to retain market share.
The combination of DAB and Self Trade creates Europe's third largest brokerage by number of accounts, with leading positions in Germany (#1 by customer assets, #3 by number of accounts) and France (#3 by number of accounts). DAB - Self Trade will also have online operations in Italy, Spain, Switzerland and the UK.
DAB, majority-owned by HypoVereinsbank, is entering a one-to-four share exchange with Self Trade's backers - SE Banken, Rothschilds, Salomon Oppenheim, and Net Partners - in a deal which values the broker at EUR 911 million, (£560 million). This implies a premium of 21% to Self Trade's closing share price of EUR 12.81 on 12 September.
The new group expects revenue synergies to be generated through the transfer of DAB's expertise in the business-to-business segment, through an increase in the range of mutual fund products offered to SELF TRADE's customers as well as the roll-out of additional services such as after hours trading.