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Minor hurdle unlikely to derail ICAP/Tullett deal

Merger expected to complete before the year-end
June 8, 2016

Tullett Prebon 's (TLPR) proposed acquisition of the voice-broking business of rival ICAP (IAP) looks set to complete later this year after a Competition and Markets Authority (CMA) investigation into the deal only threw one minor, and surmountable, hurdle in its path.

IC TIP: Hold

The CMA ruled that there were no competition issues raised in 19 of the 20 product categories it reviewed, but did raise concerns about the trading of oil products in the Europe, Middle East and Africa (EMEA) region where the combination of the two businesses could be detrimental to competition. The CMA will further investigate this category alone "unless suitable remedies are offered".

Broker Numis estimated that this category was worth around £45m in revenues last year, which only represents 3 per cent of the prospective combined revenues of the two businesses and could be more than mitigated by the proposed £80m in savings forecast by the combined businesses over the medium term.