Charles Schwab Corp. agreed to pay $1.8 billion to acquire the investment management arm of USAA, the insurance company that mainly serves military veterans and service members, according to a statement Thursday.
The transaction will add more than 1 million new accounts with about $90 billion in assets to Schwab's $1.9 trillion in investor services. The transaction is expected to close next year, subject to regulatory approval.
"We have long admired USAA's mission to enhance the financial security of our country's military service men and women and their families," Schwab CEO Walt Bettinger said in the statement.
"This agreement with Schwab can help enhance our members' financial futures with a client-first approach that offers access to more choices in investment products," USAA CEO Stuart Parker said.
The deal, reported to be underway last week, was announced after markets closed. Schwab fell 0.5% Thursday to $44.07 in New York. The stock has risen 6.1% this year, compared with a 15% gain for an S&P index of asset managers and custody banks.