The competition concerns were raised by the UK watchdog after it launched initial investigation into the merger of ION and Broadway
UK competition watchdog Competition and Markets Authority (CMA) has agreed to the proposal put forwarded by ION Investment Group (ION) to sell Broadway’s fixed income business to resolve competition concerns about the merger of the two companies.
ION and Broadway Technology (Broadway) offer specialist trading systems to financial institutions to trade foreign exchange (FX) and fixed income securities (FI) such as government bonds.
In February 2020, ION announced the acquisition of a controlling stake in Broadway alongside private investment firm Long Ridge Equity Partners and the latter’s founders.
The deal, which is part of ION’s strategy to enter into foreign exchange markets, was subsequently closed.
In Phase 1 of the investigation which concluded in July, the CMA referred the merger to Phase 2 investigation unless ION and Broadway agree to undertake measures raised in the investigation.
In the initial investigation, CMA said that ION is by far the largest supplier of the FI electronic trading systems and Broadway is one of the only two significant competitors.
As per the UK watchdog, the merger could result in significantly reduced choice of suppliers for. Also, it identified the potential for higher prices or more burdensome terms and conditions on their services.
CMA approves ION’s proposal
ION has responded to the concerns raised by the CMA by agreeing to sell Broadway’s FI business including the underlying software and the brand to a buyer consortium led by Broadway’s CEO.
The CMA has approved the deal and said that the move will fully address the competition concerns and restore the situation in the supply of FI electronic trading systems to pre-merger conditions.
As the concerns have now been addressed, the CMA has agreed not to refer the deal to an in depth Phase 2 investigation.