Bank of New York

(BK) - Get Report

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

Bear Stearns


, 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.