Daiwa Capital Markets, the investment banking arm of Japan-based Daiwa Securities Group, is acquiring the global convertible bonds and Asian equity derivatives business lines of Belgium-based KBC Group, for a total consideration of approximately $1bn.
Daiwa said that the global convertible bonds business, which operates from offices in Hong Kong, London and New York, offers a complete range of secondary market services for issuers and investors across the global universe of convertible bonds, counting some 350 clients across 25 countries.
The Asian derivatives business, which operates out of Hong Kong, provides market making services in the listed Hong Kong warrants market and generates customer flow business from the issuance of equity-linked notes and over-the-counter derivatives based on the equity of Asian companies.
Daiwa will be acquiring the profitable global convertible bond and Asian equity derivatives business lines in all three locations, staffed by approximately 150 professionals.
Both the convertible bonds and equity derivatives businesses will sit within Daiwa’s Global Derivatives product line, headed by Dominique Blanchard.
Mr Blanchard said: “Our newly acquired derivatives business, meanwhile, will significantly boost our equity capabilities as we build a high quality Asian derivatives platform across rates, fixed income, FX, and equity markets.”
Luc Popelier, Brussels-based CEO of market activities at KBC Group, said: “The experience and know-how that both businesses have built up over the years will enable them to continue responding to the increasing demand for new innovative products and for high-quality service.”
However, the acquisition is subject to regulatory approval.