Interactive Investor has agreed to buy TD Bank Group’s European direct investing business for an undisclosed sum.
It has claimed the deal will create the UK’s second largest online stockbroker with assets under administration of £18bn.
The deal has been financed through an investment from funds advised by JC Flowers & Co LLC, which will have a majority shareholding in the combined business.
Adam Seale, chief executive of Interactive Investor, said: “This combination will bring real benefits to both Interactive Investor customers and TD Direct Investing customers.
“The enlarged Interactive Investor will have increased scale, expertise and resource, enabling it to provide customers with award winning online investment services at low charges.
“We look forward to welcoming all our new customers to Interactive Investor and championing the needs of individual investors.”
Mr Seale said there would be no immediate changes for customers of either Interactive Investor or TDDI.
Leo Salom, executive vice president of TD Wealth at TD Bank Group, said: “With this transaction, we will remain focused on our core areas of growth in North America, where we are a top-10 financial institution with an ambitious agenda to expand our wealth franchise, which currently serves 2.2m clients and has more than $700bn (£571bn) in client assets across Canada and the US.”
TDDI holds £14.5bn of assets for its customers, with a £2bn increase in the past year.
Mr Seale will continue as chief executive, with Hugo Van Vredenburch and Barry Bicknell, II’s chairman and CFO respectively, taking on these roles in the combined business.
John Tracy, the chief executive of TDDI, will assist during a transitional period to support the integration.