Final M&A deal of 2016! Tullett Prebon adds to voice brokerage by buying ICAP’s broking business for $1.28 billion

Marking the end of the year, a large-scale M&A deal has completed between Tullett Prebon and ICAP, expanding Tullett Prebon’s voice brokerage business and allowing ICAP to concentrate on electronic markets and specialist services including post-trade settlement

British interdealer broker ICAP go from strength to strength

This is the final business day of 2016, however it has not stopped large electronic and traditional brokerage stalwarts from continuing to complete vital acquisitions.

FinanceFeeds predicts that 2017 will be a year of mergers and acquisitions at high level, as detailed in our research on the year ahead, however today’s finalization of a large deal is one that strengthens a very traditional aspect of the brokerage business, that being voice brokerage.

London’s Tullett Prebon, one of the largest voice brokerage firms that remain in existence, has acquired the entire global brokerage division of ICAP, including its brand name.

This is the completion of a deal that has been on the cards for quite some time, with a notable aspect of it being the renaming of British interdealer broker ICAP to NEX Group PLC once it has sold its global brokerage business to Tullett Prebon which completes ICAP’s transformation into a specialist in electronic markets and post-trade settlement and processing services via its EBS BrokerTec and Traiana divisions.

ICAP CEO Michael Spencer had stated in May this year that the ICAP brand would be included in the £1.1 billion transaction to offload the entire ICAP Global Broking business, however the deal was expected to complete in November rather than the end of this year, however the deal which has now concluded is actually worth £1.28 billion, as confirmed by a conversation between FinanceFeeds and a spokesperson on the deal today.

The transaction has been completed on an all-share basis, meaning that no cash transaction was involved, and the acquisition was completed using share capital.

Last month Tullett Prebon received approval from the Financial Conduct Authority to proceed, which meant the ICAP brand was transferred to Tullett Prebon and the new group was renamed NEX Group.

“This deal creates the leading interdealer broker in the world. It is a transformational acquisition for TP ICAP, providing a unique opportunity to accelerate our strategy and deliver for our clients, our employees and our shareholders,” said TP ICAP CEO John Phizackerley.

Stuart Bridges, ICAP’s finance director today stated “We are seeing the contracting of the banks’ balance sheets and an ongoing reduction in worldwide volumes, It’s quite a tough environment for that business.”

Tullett Prebon plans to make the combined voice-broking business more profitable by cutting infrastructure, technology and operations costs. While the company may decide to reduce the number of voice brokers after completing the acquisition, it has no plans to do so during the first year of life for the combined business.

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