Societe Generale has finalised the acquisition of Credit Agricole’s 50% stake in the capital of Newedge, a derivatives brokerage subsidiary, thus bringing its ownership to 100%. As part of the deal, it has also sold 5% of the capital of Amundi to Credit Agricole, thus bringing Societe Generale’s stake in the company to 20%.
This acquisition will bring together the strengths of a major international banking group with those of a world leading derivatives broker. With the combination of Societe Generale’s activities and Newedge’s execution and clearing services (both on listed and OTC products), clients will benefit from a fully integrated market activities offering, including cross asset research, tailor-made investment and hedging solutions, in addition to a leading prime brokerage offer, a well-recognized agency model and direct execution, across 85 markets worldwide.
Newedge’s market coverage included ETFs (exchange traded derivatives), cash markets and OTC derivatives pertaining to fixed income, interest rates, commodities, Forex (foreign exchange), metals, equities and indexes, and energy and emissions.
“The finalization of the acquisition of Newedge is a significant strategic initiative which will allow us to position ourselves as key player in the rapidly growing sector of post trade services for investors”, said Christophe Mianne, Deputy Head of Societe Generale’s Global Banking and Investor Solutions. “We will be able to offer our clients the best of both institutions: the financial guarantee and financing capacities of a leading bank, allied with Newedge’s leading market positions, in particular in prime brokerage and clearing services. We are thus strengthening our international presence, whilst positioning ourselves favorably in the new regulatory environment.
These transactions are expected to result in a moderate positive impact on the Group’s earnings and a negative impact of approximately 10 bps on the Group’s Basel 3 Core Tier One ratio in Q2 2014.
The completion of the project has been approved by the relevant regulatory authorities.