E*Trade Group has entered a non-cash agreement to acquire a 7.5 per cent equity stake in E*Trade Australia.
Under the deal, E*Trade Australia will receive an exclusive royalty-free trademark licence for electronic retail and institutional brokerage and other financial services in Australia and New Zealand.
E*Trade Group will transfer its current technology maintenance and development obligation to E*Trade Australia, immediately reducing operational costs.
Jarrett Lilien, chief brokerage officer and managing director Asia-Pacific and Latin America, says: "This agreement demonstrates our confidence in the ability of E*Trade Australia to advance E*Trade's global brand in these key international markets."
The non-cash transaction is valued at $1.6 million based on approximately 6.4 million shares issued to E*Trade Group.
E*Trade's continued expansion follows the recent bail-out of the Australian market by Charles Schwab. Citing weak trading conditions, the broker cut a deal with TD Waterhouse for the transfer of its 51,000 Australian accounts early this year.