French bank BNP Paribas has signed a definitive agreement to acquire Bank of America’s equity prime brokerage business. The transaction is subject to regulatory approval and completion is expected in the second half of 2008. The transaction will involve the transfer of client relationships, employees and technology systems.
Bank of America’s equity prime brokerage business provides a range of services to hedge funds, including secured financing, securities settlement, custody, capital introduction, securities lending, technology and custom IT solutions. The unit has more than 500 hedge fund clients and more than 300 employees.
BNP Paribas said the acquisition will allow it to offer its equities and derivatives platform to a wider client base while keeping in line with its risk standards. The bank added that the acquisition is a good strategic fit with limited integration risk and negligible impact on the bank’s tier 1 capital ratio.
“We are confident that this deal will bring significant value to our new customers, the teams who will join us, and the shareholders,” said Baudouin Prot, CEO of BNP Paribas, in a statement.