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Cowen Group, the financial services company, has unveiled plans to buy Convergex as it looks to scale up its brokerage business.
New York-based Cowen said that it will pay $116m in cash and stock to buy Convergex from private equity group GTCR, Bank of New York Mellon and other shareholders.
The duo would have generated $400m in brokerage execution revenues in 2016, Cowen said in a statement.
Consolidation has become important in the brokerage industry amid rising costs and lower trading volumes — something that has been accentuated by the historically low volatility in US equities this year.
“The addition of Convergex’s global platform will also establish meaningful scale for Cowen’s equities business by significantly bolstering our capabilities in prime services, commission management, algorithmic and electronic trading, as well as clearing services,” said Jeffrey Solomon, Cowen’s president.
The Financial Times reported last month that the two groups were in talks over a potential tie-up.
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