Schwab, US Trust Soar on $2.7 Billion Merger

U.S. Trust shareholders will receive 3.427 shares of Schwab stock for each share of U.S. Trust. Based on Schwab's closing stock price of $37.625 Wednesday, the transaction values each U.S. Trust share at about $129. U.S. Trust closed Wednesday at $78.875.

The combined company would have annual revenue of $4.5 billion, earnings of $663 million and about $800 billion in assets under management.

``We've long held a goal of building an organization that can serve investors completely - from those taking their first steps towards becoming lifelong investors, to those looking to manage their accumulated wealth for themselves and their families," said Charles R. Schwab, the chairman, co-chief executive and founder of the company that bears his name. ``U.S. Trust represents for us a piece of the puzzle that had been missing in our offering to affluent investors."

U.S. Trust was founded in 1853 and is based in New York, with 1,900 employees and offices in nine states and Washington, D.C. The company provides investment management and consulting services, financial and estate planning and private banking and has $86 billion in assets under management.

San Francisco-based Schwab, through its main business, Charles Schwab & Co., is the nation's fourth-largest financial services company with 340 branch offices. It has 6.4 million customers.

``Schwab will be able to offer affluent clients access to U.S. Trust's wealth management expertise, while Schwab's vast technological resources will enable U.S. Trust to combine our traditional high-touch approach with high-tech to better serve our clients," said H. Marshall Schwarz, chairman and CEO of U.S. Trust.

The companies said there are more than 6 million U.S. households each with a net worth of over $1 million and that the numbers of Americans with large investment portfolios is expected to grow at a double-digit pace in the next three years.

Both companies said they will retain their separate identities, while sharing synergies and capabilities across their complementary business lines. The companies expect the deal to close by July.