5 August 2011
French global banking and insurance group BNP Paribas is expanding its local footprint through the acquisition of a majority stake in Cadiz Securities, the derivatives research and brokerage unit of South African financial services group Cadiz Holdings.
According to a report by Business Day this week, the size of the stake was 60%, purchased for a sum of R150-million.
BNP Paribas is one of the world’s strongest banking groups. Headquartered in Paris, the BNP Paribas group has operations in more than 80 countries and over 200 000 employees across Europe, North America and Asia.
“We are particularly happy to make this investment and look forward to welcoming onboard Cadiz Securities staff and expertise,” BNP Paribas Corporate & Investment Banking (CIB) emerging markets head Eric Deudon said in a statement this week. “The deal demonstrates both a commitment to our strategy of developing an offer in emerging markets, and our growth ambitions in derivatives research and brokerage.”
Providing global solutions
The agreement, which is expected to close before the end of the second quarter of the year, will see BNP Paribas Corporate & Investment Banking and Cadiz Securities join forces to develop a combined offering. As such, the new set-up will provide global solutions in cash equities, equity derivatives research and brokerage to both local and international clients.
Cadiz Holdings CEO Ram Barkai said the transaction would offer Cadiz global reach to complement the current business in South Africa: “We identified the need to reposition our securities business to gain access to an offshore client base and offshore research.
“We also recognised the need to shift our focus to where the main liquidity flows,” Barkai said. “Our credentials in the derivatives market and our research offering have enabled us to attract an international bank of the standing of BNP Paribas.”
International presence and market expertise
By leveraging BNP Paribas’ international presence and market expertise, the agreement is expected to boost Cadiz’s global reach in cash and derivatives to complement its existing business in South Africa.
BNP Paribas will meanwhile profit from Cadiz’s local expertise as it makes further strides in growing its existing equities product offering in emerging markets.
“We look forward to benefiting from their wealth of international experience and top global derivatives expertise,” said Barkai. “It was also great to have Wesgro assisting us with finding a suitable partner.”
Unsurpassed track record
Cadiz Securities currently employs more than 40 experienced professionals, working for a strong and diversified local client base active in both stock brokerage and equity derivatives. The firm holds an unsurpassed track record of 15 years as the number one derivatives research house in South Africa.
The new business will be branded to reflect the interests of BNP Paribas and Cadiz. Dan Ahern, the managing director of Cadiz Securities, will be appointed as chief executive officer of the business, while Ram Barkai will be the chairman. The business will continue using Cadiz’s existing infrastructure and resources.
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