UPDATE 2-Britain's IG to buy tastytrade for $1 billion in U.S. foray

* Tastytrade deal is IG’s biggest to date

* IG shares down in early trade

* Deal comes as IG posts surge in H1 profits (Adds price share move, IG results)

Jan 21 (Reuters) - Britain’s IG said it plans to buy U.S. trading platform tastytrade for $1 billion, venturing into North America after a stellar year for the new breed of retail investment brokerages.

Coronavirus-driven volatility has driven a surge in revenue and profit for IG and British rivals including CMC Markets and Plus500, while and its app-based trading have has risen to prominence in the United States.

IG said on Thursday that tastytrade shareholders will get $300 million in cash and 61 million IG shares, valued at $700 million, in the London-listed company’s biggest deal to date.

News of the planned tastytrade acquisition, part of June Felix’s diversification strategy since becoming IG chief executive in late 2018, saw IG shares fall 2.3% by 0812 GMT.

Shares in IG, which dates back to 1974, gained 24% last year.


IG, whose first-half earnings more than doubled, said the deal will be low single digit accretive to its adjusted earnings per share in the first full year after closing.

Tastytrade has more than 105,000 active trading accounts and some 900,000 unique registrations, while its YouTube channel boasts 206,000 subscribers and 8 hours of live programming a day.

By comparison, Robinhood, which said in May it had 13 million user accounts and was valued at $11.2 billion as of December, has 3,560 subscribers on the video sharing platform.

Tastytrade’s senior leadership will stay on after the takeover by IG, which the two companies said they hope to complete in the first quarter of the next financial year.

“While our long-term goal has always been to go global, we waited almost 10 years until we found the right partner and perfect match,” Co-CEO of tastytrade Tom Sosnoff said. (Reporting by Indranil Sarkar and Muvija M in Bengaluru; Editing by Krishna Chandra Eluri, Patrick Graham and Alexander Smith)