An interesting transaction that will simultaneously increase consolidation in metals brokerage and supplement Soc Gen's futures business, expanded previously with the purchase of Newedge.
Jefferies Group said it will sell most of its Bache unit's commodities and financial derivatives accounts to Societe Generale, ending the investment bank's four-year foray into the competitive brokerage business. The bank said it will wind up the remaining business, a mid-tier global player which was largely built around Prudential Bache, one of the world's oldest commodities futures brokers. The French bank said the deal, terms of which were not disclosed, is expected to close by the end of the second quarter. The deal removes another mid-sized metals broker with a focus on industrial customers from nickel merchants to copper fabricators that hedge their sales and purchases in the futures market. Last year, ICAP closed its metals business last year, while several banks including Deutsche Bank and Barclays have shut their commodities futures businesses over the past year or so.