Antitrust Law Daily Wrap Up, ANTITRUST NEWS: U.K. competition authority to investigate merger of global interdealer brokers, (Jun 8, 2016)

By Michael Menzhuber, J.D., LL.M.

The U.K. Competition and Markets Authority (CMA) announced yesterday that it intends to undertake an in-depth investigation of the anticipated acquisition of ICAP plc’s (ICAP) voice/hybrid brokering business by Tullett Prebon plc (Tullet).

Tullett and ICAP are leading global interdealer brokers (companies that typically sit between investment banks helping to find buyers and sellers of large securities), according to the agency announcement. After detailed consideration of the 20 overlapping product categories in which the parties’ voice/hybrid services overlap, the CMA believes that only one of these overlapping product categories gives rise to a realistic prospect of a substantial lessening of competition.

The category of concern for the CMA is the voice/hybrid brokering of oil products where: (1) competition from other brokers is more limited; (2) there is a lesser constraint from electronic platforms and exchanges; and (3) the CMA received a number of third party concerns. The merger will, therefore, be referred for an in-depth phase 2 investigation by an independent group of CMA panel members unless Tullett and ICAP are able to offer undertakings which address the CMA’s competition concerns.

The CMA did not find any competition concerns in relation to either the provision of data and electronic platforms or the supply of risk mitigation services in which the parties’ activities will overlap as a result of ICAP’s acquisition of a minority stake in Tullett.

Companies: Tullett Prebon plc; ICAP plc

News: Antitrust