Societe Generale has entered an agreement to acquire the majority of the futures activities from global investment banking firm Jefferies.
All client activities from Jefferies’s futures arm, Bache, will be transferred to SocGen, including mainly futures execution and clearing activities. SocGen’s diversified platform, experience and healthy balance sheet is expected to mean a seamless transition of activities.
The transaction remains subject to closing conditions, and is expected to be completed in Q2 2015. Leading up to completion of the acquisition, Jefferies will start to exit its remaining Bache futures and commodities activities.
David Escoffier, deputy head of global markets for Societe Generale Corporate & Investment Banking, said: “This transfer is a good opportunity which allows us to cement our leadership in the rapidly growing sector of listed and over-the-counter derivatives clearing and execution, and post-trade services whilst continuing to position ourselves favourably in the new regulatory environment.”
“Transferred clients will benefit from the bank’s full suite of innovative solutions. All our teams are already mobilised and thrilled to welcome those new clients and facilitate their transition to our high quality service platform."
Jefferies has estimated that the acquisition will result in a one-time cost of about $66 million after tax. Of this, $23 million is expected to be non-cash, and the remainder will be compensation, severance and technology-related costs. However, Jefferies anticipates that the change will be beneficial in the long run.
