Bank of New York
agreed to buy the Pershing stock-trade clearing unit of
Credit Suisse First Boston
for $2 billion cash.
Pershing is the second-largest trade clearinghouse in the U.S. behind
, providing clearing services for 850 broker-dealers out of 13 locations worldwide. It handles about 10% of the trades carried out on the
New York Stock Exchange
Bank of New York, which has cobbled together a large clearing presence through a series of acquisitions over the last several years, will tap the public debt and equity markets for up to $1.1 billion of the acquisition's financing. It expects the deal to dilute earnings by 2 or 3 cents a share in the first calendar year after its completion, then add to them by that amount in the second year.
CFSB is shedding a non-core asset in an industry that has seen consolidation and pricing constriction over the last few years. It picked up Pershing in its $13 billion buyout of
Donaldson, Lufkin & Jenrette.