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Stifel Agrees to Acquire Fixed-Income Group From Knight

Stifel Financial Corp. (SF), the St. Louis-based brokerage, will acquire Knight Capital Group Inc. (KCG)’s U.S. institutional fixed-income sales and trading business.

Knight’s European institutional fixed-income sales and trading team is also part of the deal, which includes about 100 people, Stifel said today in a statement, without disclosing terms. The group covers high-yield and investment-grade corporate bonds, asset-backed and mortgage-backed securities, emerging markets and fixed-income research.

Stifel Chief Executive Officer Ron Kruszewski, 54, has pointed to consolidation in the brokerage industry as a way for his firm to pick up market share. Since Kruszewski became CEO in 1997, Stifel has spent more than $1.7 billion on acquisitions, according to data compiled by Bloomberg.

“Expanding our fixed-income business has been an initiative of ours,” Kruszewski said today in the statement.

Knight agreed in December to be purchased by Getco LLC in a $1.4 billion deal, ending its 17 years of independence. Knight, which lost more than $450 million from computer glitches that led to a flood of errant orders, was bailed out by six financial firms including Getco and Stifel in August.

Other suitors for the debt team included Guggenheim Partners LLC, Canaccord Financial Inc. and Sterne Agee & Leach Inc., people with knowledge of the matter said earlier this year.

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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