By Osamu Tsukimori, CBS MarketWatch.com
TOKYO (CBS.MW) -- Japan's Softbank Investment said on Tuesday it will buy a majority stake in online broker E-Trade Korea, a joint venture that is 10 percent owned by U.S.-based E-Trade Financial.
The Japanese venture capital company /zigman2/quotes/200067066/delayed JP:8473 -0.08% -- which merged with E-Trade Japan, a joint venture between Japan's Internet investor Softbank and U.S.-based E-Trade /zigman2/quotes/210213433/composite ET +1.44% -- said in a statement it will spend 22.185 billion won ($19 million) to obtain an 87 percent stake in the South Korean broker from a group of investors.
The group includes 40 percent-owned Softbank /zigman2/quotes/207303954/delayed JP:9984 -1.61% /zigman2/quotes/202815238/composite SFTBF +2.83% as well as 15 percent-owned LG Investment & Securities, among others.
E-Trade Financial will hold the remaining stake of 13 percent, increasing its stake from 10 percent, Softbank Investment said in a statement.
Softbank Investment said it will help E-Trade Korea develop to a comprehensive securities firm by tapping on expertise it has gained in Japan, where E-Trade Japan ranks as a major online broker. Cross-border stock trading for investors in Japan and South Korea is another objective.
Eventually, the backers of E-Trade Korea intend for it to go public, it Softbank Investment added.
E-Trade Korea was established in December 1999 as the country's first online broker and has since expanded by attracting customers drawn by its low commission fees. The broker said its net profit soared 32 times in the year ended March to 3.845 billion won from a year earlier.
At the end of March, Softbank Investment was 47.2 percent owned by Softbank's 100 percent-owned subsidiary, Softbank Finance, a developer of one-stop online market for financial services.
Shares of Softbank Investment traded down 0.9 percent at 110,000 yen in midafternoon dealings in Tokyo, while Softbank added 0.4 percent at 4,630 yen.