By Tim Cave
BGC Partners, the U.S.-based interdealer broker, has agreed to
acquire the main assets of U.K. rival RP Martin, one of the
interdealer brokers fined in the Libor-rigging scandal.
The New York-based group has acquired RP Martin's London-based
assets and expects to buy "further businesses and assets of RP
Martin in Sweden and the Netherlands" next year, it said in a
statement on Monday.
The deal is subject to regulatory approvals and certain closing
conditions and financial terms weren't disclosed.
The acquired assets generated revenues of more than $50 million
in the year to September 30, BGC said.
The acquisition reflects the growing pressures faced by
interdealer brokers from derivatives regulation, low market
activity and rising infrastructure costs. The industry, in which
brokers deal in complex derivatives between banks, has been
dominated by five big players, including BGC, Icap, Tradition, GFI
Group and Tullett Prebon, but talk of consolidation has grown.
Speaking to analysts last month, Icap's chief executive Michael
Spencer said that there was "overcapacity in the global voice
broking market and consolidation would be welcome".
Mr. Spencer added at the time: "There are five players and
really only room for three. It is unlikely that we will be part of
this current consolidation but, of course, you can never say
never."
BGC is also in talks to acquire GFI Group for $675 million,
rivaling an attempt by futures market operator CME Group to acquire
GFI's electronic and risk management assets.
RP Martin is one of the industry's smaller brokers and
specializes in European rates and currencies products. It has
approximately 170 brokers in the U.K., Sweden and the Netherlands,
BGC said today.
Shaun Lynn, president of BGC Partners, said in a statement: "We
expect it to bolster our European business by taking us into new
geographies and complementing and strengthening our existing rates
and foreign exchange platforms in the U.K. and Europe."
RP Martin was fined a total of $2.3 million by U.K. and U.S.
regulators in May for its involvement in the attempted rigging of
Libor, one of the smallest fines against firms involved in the
scandal.
The UK's Financial Conduct Authority said at the time that RP
Martin brokers colluded with a trader at UBS to manipulate the
Libor rate tied to the Japanese yen, in return for more than
$400,000 in bribes.
Two of its former brokers have been charged by U.K. prosecutors
over rate rigging.
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