The discount brokerage industry shrunk further yesterday with the announcement that online giant E-Trade Financial would acquire rival HarrisDirect in a $700 million deal.

"The decision to sell HarrisDirect followed an assessment of HarrisDirect's ability to compete in a changing landscape," said Tony Compor, president and CEO of Montreal-based BMO Financial, HarrisDirect's parent company, in a statement. "Given the additional amount of capital that would have been required to grow the business and remain competitive in the current environment of consolidation, we concluded that HarrisDirect would be more valuable to another participant in the online brokerage industry."

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