Tullett Prebon Completes $1.6 Billion Deal for ICAP Brokers

Updated on
  • Enlarged Tullett will trade as TP ICAP with 3,425 brokers
  • ICAP becomes NEX Group, an operator of electronic markets

Tullett Prebon Plc has completed the 1.28-billion-pound ($1.6 billion) purchase of the voice-broker business of its former rival ICAP Plc, creating a dominant firm in the business of matching trades between banks.

The new business, which has been rebranded as TP ICAP Plc, has 3,425 brokers who will continue to run competing desks, trading under the Tullett Prebon and ICAP brands. TP ICAP will use its larger size to cut costs in compliance, technology and other support functions, in theory giving it an advantage over rivals BGC Partners Inc. and Cie. Financiere Tradition SA.

John Phizackerley

Source: TP ICAP

“This deal creates the leading interdealer broker in the world,” said John Phizackerley, TP ICAP’s chief executive officer. “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.”

Voice brokers specialize in trades in less liquid assets, such as interest-rate swaps and corporate bonds. They make trades happen by connecting buyers and sellers who might not find each other on an electronic market.

ICAP, which sold its name to Tullett as part of the deal, becomes NEX Group Plc, a specialist operator of electronic markets and post-trade services. NEX will continue to employ some voice brokers, however, through joint ventures with Tradition and a Chinese firm.

“This is a momentous and exciting day for us all,” said Michael Spencer, NEX’s CEO. The new firm will be “a technology-services company ready to capitalize on the enormous opportunities that technology affords to financial markets in the 21st century.”

TP ICAP’s shares climbed 2.8 percent to 425 pence at 10:02 a.m. in London, while NEX shares traded at 454.9 pence. As the deal completed this morning, 310.3 million shares in the new TP ICAP were transferred to shareholders in the old ICAP. The shares could be sold from 8 a.m. this morning.

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