Ameritrade to Buy Rival in Wave of Consolidation

The plunge in stock trading by small investors is triggering more consolidation in the online brokerage business.

Ameritrade Holding Corp. said Tuesday that it will buy Deutsche Bank’s National Discount Brokers Corp. online unit for about $154 million in stock.

Omaha, Neb.-based Ameritrade, the No. 4 online brokerage, has 1.6 million accounts. It will gain 316,000 accounts and $6.3 billion in client assets with the deal. The company said the acquisition will add $67 million in annual revenue, which it said will immediately add to earnings.

Ameritrade is paying about $500 per NDB account.

Slowing business is an opportunity to acquire smaller brokers, said Ameritrade Chief Executive Joseph Moglia.

The NDB brand, known for the mallard it employs in its advertising campaign, eventually will be dropped as the company is incorporated into Ameritrade.

Ameritrade shares (ticker symbol: AMTD), down about 8% this year, rose 53 cents to $6.44 on Nasdaq on Tuesday.

Deutsche Bank, Europe’s biggest bank, will keep the market-making business of National Discount Brokers Group. The unit serves as a middleman for stocks traded on Nasdaq.

Deutsche Bank has owned all of NDB since October, when it paid $874 million for the 84% of the company it didn’t already own.

“The online broker arm never really fit in Deutsche’s U.S. strategy,” said Dieter Hein, an analyst at Credit Lyonnais in Frankfurt. “The bank isn’t present in the U.S. retail market so they don’t need NDB, and NDB’s broker is too small to become profitable alone.”

The sale will give Deutsche Bank a stake of between 10% and 14% in Ameritrade.