In a historic move, interdealer broker ICAP agreed to sell its voice brokerage to rival house Tullet Brebon. This combination appears to be the result of increased pressure on the voice business caused by the simultaneous effects of technological change and regulation.
British interdealer brokers Tullett Prebon Plc and ICAP Plc have agreed to combine their voice broking businesses in a 1.11 billion-pound ($1.68 billion) deal to better compete in a sector where trading volumes have shrunk. In a reverse takeover, Tullett is buying the global hybrid voice broking and information business of its much bigger peer to create the largest player in that sector, while ICAP will focus purely on electronic trading and post-trade services. Kicking off consolidation among interdealer brokers this year, BGC Partners acquired U.S. rival GFI Group after a protracted takeover battle. Tullett will continue under the name TPICAP, employing around 3,000 brokers and 2,000 support staff. The slimmed-down ICAP will retain the electronic platforms EBS and BrokerTec, the transaction processing business Traiana and post-trade risk mitigation businesses TriOptima and Reset.