Icap expands US presence with £154m buy of online broker

The world's largest inter-dealer broker, Icap, has bought the bond trading operations of the US online broker BrokerTec Global in a deal worth about $240m (£154m).

This is the third deal for Icap ­ which acts as a middleman to let banks trade bonds, currencies and other securities with each other anonymously ­ in nine months.

BrokerTec handles more than $140bn fixed-income transactions a day and has traded more than $38,000bn since its launch two years ago by 14 of Wall Street's largest bond-trading banks. Icap has a daily turnover of more than $300bn. The acquisition will give it more than 40 per cent of the electronic US government bond market and make it the biggest US electronic bond broker behind Cantor Fitzgerald.

Icap was last week cleared by the High Court of poaching Cantor staff illegally

Michael Spencer, group chief executive of Icap, said: "There are still significant opportunities to benefit customers by increasing competitiveness in the inter-dealer broking industry."

Icap is paying with 12 million new shares, valued at about $154m, and up to $87m more in stock, depending on the company's performance in the first year after the deal completes.

In the first half of 2002, BrokerTec made a profit before tax of $4.1m, based on revenue of $44m. Its futures and clearing arms are not part of the deal.

Mr Spencer said he would use the low operating costs of BrokerTec's electronic trading platform to improve efficiency in Icap.