Royal Bank of Canada to Buy Tucker Anthony

Royal Bank of Canada said Wednesday that it will buy brokerage Tucker Anthony Sutro for $625 million and merge it with Dain Rauscher Inc. to create the ninth-largest U.S. full-service securities firm.

It’s the latest of a series of deals for Royal Bank, which purchased Minneapolis-based Dain Rauscher earlier this year. The purchase also continues the trend of banks worldwide moving deeper into the securities industry.

The new entity, to be called RBC Dain Rauscher, will be based in Minneapolis and led by Dain Rauscher Chief Executive Irving Weiser.

Boston-based Tucker Anthony manages 300,000 accounts and administers $48 billion in assets. It has 2,700 employees, with 22 brokerage offices primarily on the East and West coasts.

In North America, Royal Bank of Canada will now have 3,500 investment advisors, 300 offices and $177 billion under administration.

Tucker Anthony stock (ticker symbol: TA) surged as high as $27.40 a share on merger rumors last month. On Wednesday the shares slipped 34 cents to $23.61 on the New York Stock Exchange.

Royal Bank will pay $24 a share cash for Tucker Anthony.

Canada’s “big banks have many more opportunities south of the border than north of it,” said Raphael Soifer, chairman of Soifer Consulting in Ridgewood, N.J. “Canada is not that large a market, and they [Canadian banks] already dominate the financial services industry there.”

Canadian Finance Minister Paul Martin blocked Royal Bank’s proposed merger with smaller rival Bank of Montreal in 1998. Since then, Royal Bank has looked elsewhere for growth opportunities.