Online brokerage E*trade Group Inc., Palo Alto, CA, and TeleBanc Financial Corp., Arlington, VA, this week joined forces in a deal worth $1.8 billion.
The merger will take the form of a stock swap, in which TeleBanc shareholders will receive 2.1 shares of E*trade common stock for each share of TeleBanc's common stock. TeleBanc shareholders will ultimately own 13 percent of E*trade's common stock.
Both companies said the merger is one of the first attempts in the United States to unite banking and brokerage activities in one online proposition. Under one account, customers will be able to complete a range of online financial transactions, including paying bills, trading stocks, and purchasing mutual funds, certificates of deposit and fixed-income securities, they said.