The world’s largest futures exchange, CME Group, has agreed to buy Michael Spencer’s Nex Group in a £3.9bn deal that will net the former Tory party treasurer £670m.
CME also picked London as its European headquarters, giving a much-needed boost to the UK government during its Brexit negotiations. The move comes after CME’s decision last year to shut its loss-making London bourse and clearing house.
“CME’s decision to choose London as its European headquarters is also a signal of tremendous support for Britain’s financial services sector,” Spencer said.
Spencer, the Nex chief executive, owns a 17.6% stake in the financial broker he founded in 1986. It changed its name from Icap at the end of 2016 and is one of the world’s biggest money-broking firms.
Spencer will join the CME board as a special adviser and will stay on for a minimum of two years to oversee the integration of the two businesses.
It is the biggest overseas acquisition made by Chicago-based CME, and its largest in a decade.
CME said it would pay £10 a share for Nex – £5 in cash and 0.00444 new CME shares per Nex share. Nex said it would recommend the deal to shareholders.
Investors will also receive a final dividend for the year to March 2018, which will not exceed 7.65p a share.
The takeover, which still has to be approved by Nex shareholders, will lead to 750 job losses over the next three years in the combined business, or 16% of the total workforce. It is not clear where they will occur.
Nex has 1,900 employees globally, including 634 in London and 42 in Bristol. CME employs 2,800 people worldwide, 400 of them in London.
Last year Nex agreed to pay back donations of £25,000 made to Conservative general election candidates following a shareholder revolt.