Icap/Tullett voice broking deal receives competition body's nod

The September 8 announcement by the UK’s Competition and Markets Authority comes after the regulator received no views on the issue from market participants during a consultation period after indicating on August 2 it had been minded to wave through the deal on those revised terms.

Confirmation that the tie-up will not now be subject to an in-depth Phase 2 investigation will come as a boost to Icap and Tullett, which both noted the regulator’s decision.

In separate responses, Icap and Tullett said the transaction remains on track to complete later in 2016.

Approval is still required from various regulators, including the UK’s Financial Conduct Authority, while other conditions must also be satisfied before the deal can close.

Icap, which intends to trade as Nex Group on completion of the sale, received approval from its shareholders in March.

Icap had originally intended to retain a 19.9% stake in Tullett as part of the deal, while distributing the remaining 36% to shareholders. In June, Icap said an agreement had been made under which it would not retain the 19.9% stake, instead distributing the full 56% of Tullett to its shareholders. That amendment is subject to a vote by Icap shareholders scheduled for September 9.

Icap said it “remains focused on obtaining the necessary approvals and the transaction remains on track to complete later this year”.

Assuming completion of the deal, Icap will be a company focused on electronic markets, post-trade and fintech investments, while Tullett will pursue its hybrid voice-broking model.

Following the CMA’s decision, INTL FCStone, a Nasdaq-listed broker, confirmed on September 8 that it would take more than 30 front-office employees across the fuel, crude, middle distillates, futures and options desks by acquiring Icap’s London-based Emea oil business.

Philip Smith, chief executive of INTL FCStone, said in a statement: “This is an excellent opportunity to add an experienced and highly regarded team within the oil broking sector. This customer-centric business helps complement our already extensive product and service offering out of London, that includes grains and oilseeds, coffee and cocoa, metals, foreign exchange, global payments and fixed income.”

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