updated 8/31/2004 7:54:39 AM ET 2004-08-31T11:54:39

Swiss banking giant UBS AG announced Tuesday that it is buying the capital markets division of discount brokerage Charles Schwab Corp. in a $265 million bid to become one of the top traders on the NASDAQ exchange.

The bank said it would pay cash for the SoundView unit in the deal, which it said it expected to close by the end of this year, subject to regulatory approval.

"This transaction is consistent with our organic growth plan in combination with targeted acquisitions to ensure the growth of our franchises," said John Costas, chairman and chief executive of UBS Investment Bank.

UBS said it would integrate the operations in the equities business of its investment bank.

"This will propel UBS to a leading position as a top trader of NASDAQ securities globally and further our goal of becoming a premier provider of services to private clients around the world," Costas said.

Schwab is selling the business less than a year after buying it for $321 million.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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