Marex agrees to buy ED&F Man Capital Markets in expansion drive

LONDON, Aug 1 (Reuters) – Commodity broker Marex agreed to buy rival ED&F Man Capital Markets to boost its metals business and expand in fixed income and equities, it said on Monday.

Marex, one of the world’s largest privately owned commodities brokers, did not disclose the purchase price of the takeover, which will leave the London Metal Exchange (LME) with one less ring-dealing member.

ED&F Man Capital Markets (MCM), the financial services division of ED&F Man Group, has 450 global employees and posted over $235 million of revenues in 2021.

The two brokers said in early July they had entered into exclusive talks about the transaction.

“This acquisition creates a more competitive, diversified and resilient firm,” Marex Chief Executive Ian Lowitt said.

The deal has resulted in the LME 0388.HK losing a member that operates in its ring, the last open-outcry trading floor in Europe, bringing the number down to eight.

Both brokers have special teams of ring traders, but only one team will be needed by the merged operation.

Marex said the takeover will expand its presence in Dubai, the Asia Pacific region and create a U.S. franchise. It is expected to be completed by the end of the year.

ED&F Man said the sale of MCM will allow it to focus on its core business of soft commodities.

“We are therefore confident that this change in ownership will be to the benefit of all our stakeholders,” said Jade Moore, group executive director of ED&F Man.

Marex, which withdrew an initial public offering last year, said in April it was still keen to list on the market and was awaiting calmer conditions before a possible relaunch.

Marex is majority-owned by private equity firm JRJ Group and its partners, Trilantic Capital Partners and BXR Group, which bought stakes in the broker in 2010.

(Reporting by Eric Onstad; Editing by Sandra Maler)

((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.