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Man Group Acquires Derivatives Brokerage GNI

Investors Offshore, London

24 October 2002


Hedge fund manager and futures broker Man Group plc yesterday confirmed that it had agreed to acquire 100 per cent. of GNI Holdings Ltd ("GNI") from Old Mutual plc for a cash consideration of £100 million.

GNI is a leading broker of futures and options, FX and equity derivative products based in London, with offices in Chicago and Geneva and over 500 staff. The acquisition will form part of Man's brokerage business, Man Financial and the combination will create the world's largest independent futures broker, with GNI's European focus providing a natural complement to Man's existing strength in Europe, the US and the Far East.

Man Group says that it will benefit from the acquisition because:

  • The combination of Man Financial and GNI will strengthen its position as the number one European player in the institutional financial futures business;
  • The acquisition will also enhance its leading position on LIFFE, Eurex, IPE and LME;
  • Man has the opportunity to build on GNI's leading position in the European equity contract for differences market - one of the fastest growing equity products in recent years.

The group says that the acquisition is likely to generate cost savings of at least £8 million per annum, and that because there is limited client duplication between Man Financial and GNI, the acquisition is expected to be earnings enhancing, after the amortisation of goodwill, in the first full financial year, to 31 March 2004.

In the six months to 30 June 2002, GNI made profits before tax of £5 million. It is expected that at completion of the transaction, which is subject to regulatory consents, the net assets of the businesses being acquired will be £64.5 million. The consideration will be met from Man's existing resources.

Commenting on the acquisition, Kevin Davis, Managing Director of Man Financial said:

'This transaction represents a major step forward in the development of Man's Brokerage business. The combination of Man and GNI significantly strengthens our position in a variety of markets, most notably listed interest rate derivatives. Additionally, GNI brings us expertise in equity derivatives, which will significantly enhance our presence in that market.'


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