The Australian Competition and Consumer Commission will not oppose Tullett Prebon’s proposed acquisition of ICAP plc’s (ICAP) global wholesale broking business, ICAP Global Broking Holdings Limited (IGBB).
“Tullett Prebon and ICAP’s customers are predominantly large, sophisticated financial institutions, and market participants generally expressed a low level of concern about the potential competitive impacts of the proposed acquisition,” ACCC Chairman Rod Sims said.
Tullett Prebon and IGBB both supply wholesale voice hybrid broking services and associated broking data services for a range of financial derivatives. The key customers in Australia are large institutional investors.
“While the proposed acquisition would result in increased market concentration and reduce the number of key suppliers in Australia from four to three, the ACCC concluded that Tullett Prebon would be competitively constrained by BGC Partners and Tradition,” Mr Sims said.
The ACCC also had regard to other potential competitors who appeared to be well placed to enter the relevant markets.
As the proposed acquisition would result in ICAP gaining a minority shareholding in Tullett Prebon, and cross-shareholdings between ICAP and Tullett Prebon, the ACCC also considered whether competition issues would arise in relation to other services that both Tullett Prebon and ICAP would each continue to supply following the proposed acquisition, including post-trade risk mitigation services. However, the ACCC concluded that a substantial lessening of competition is not likely in these other markets.
The ACCC began its review on 5 April 2016. The ACCC worked closely with the US Department of Justice, the UK Competition and Markets Authority and the Competition Commission of Singapore during the course of its review.
Tullett Prebon is a global provider of wholesale voice hybrid broking services to participants operating in the world’s major wholesale financial and commodity markets. Tullett Prebon is publicly listed on the London Stock Exchange.
ICAP is a global markets operator and a provider of wholesale electronic broking services and, through IGBB, a provider of wholesale voice hybrid broking services. ICAP is publicly listed on the London Stock Exchange.
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