ICAP PLC (Reuters) - British broker ICAP Plc (>> ICAP plc) has offered to sell its London-based oil desks to address competition concerns over the merger of its global hybrid voice broking business with Tullett Prebon Plc (>> Tullett Prebon Plc), Britain's competition watchdog said on Tuesday.
The Competition and Markets Authority (CMA) said the oil desks being offered for sale provide broking services to clients in Europe, the Middle East and Africa to an up-front buyer approved by it.
ICAP declined to name prospective buyers for the business and did not provide details on the number of employees that would be part of the divestment.
The CMA said earlier this month the proposed merger would be referred for another round of investigation unless the companies were able to address concerns about an overlap in voice/hybrid broking of oil products.
The CMA said on Tuesday it had until Aug. 16 to decide if the proposed sale was sufficient to address its concerns, or refer the merger for further investigation.
ICAP and Tullett are inter dealer brokers that match buyers and sellers of currencies, bonds and other tradeable instruments.
The companies last year agreed to the 1.11 billion pounds deal to better compete in a sector where trading volumes have shrunk due to regulation designed to rein in the riskier trading activities of their traditional investment bank clients.
ICAP and Tullett said on Tuesday that ICAP would no longer retain a 19.9 percent interest in the combined group after completion of the deal and instead, the shares would be issued directly to ICAP shareholders.
As a result, ICAP shareholders will hold about 56 percent of the combined group's share capital after the completion of the deal, the companies said in a statement.
The companies had said earlier that after the deal ICAP would hold 19.9 percent and its shareholders 36.1 percent of the new company. Tullett's existing shareholders will own 44 percent of the new company.
Tullett will continue under the name TPICAP, employing around 3,000 brokers and 2,000 support staff.
The CMA has said the two companies faced limited competition from other brokers, electronic platforms and exchanges for broking of oil products, which rakes in about 228 million pounds in industry-wide revenue each year in EMEA.
The watchdog did not find significant competition concerns in 19 of the 20 overlapping product categories it considered such as spot FX, equity derivatives and interest rate swaps.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)
By Noor Zainab Hussain
