Knight Capital Group is to acquire Kellogg Capital Markets’ designated and lead market maker businesses, which make markets in approximately 800 NYSE and NYSE Amex listed securities and 322 NYSE Arca exchange-traded funds (ETFs).
Knight says it anticipates assuming Kellogg’s responsibilities across its entire portfolio of NYSE-, NYSE Arca- and NYSE Amex-listed securities as well as Kellogg’s participation in the NYSE Amex Universal Trading Platform (UTP) programme.
The acquisition will build upon Knight’s electronic market making business by adding another venue in which to make markets. Kellogg’s Designated Market Maker (DMM) business will add to Knight’s current liquidity providing activities as a Supplemental Liquidity Provider on NYSE and a NYSE Amex UTP DMM. The addition of Kellogg’s ETF Lead Market Maker (LMM) business will be incremental to Knight’s electronic market making and institutional ETF sales and trading team.
“The Kellogg acquisition is a natural extension of two of our already successful businesses: electronic market making and ETF trading,” said Thomas Joyce, chairman and CEO of Knight Capital Group. “We are excited to further our partnership with the NYSE Euronext, a prominent global brand. We also look forward to continuing the strong and meaningful relationships that Kellogg has built with its listed companies.”
Kellogg Capital Markets is a subsidiary of Kellogg Group, a privately-held financial services organisation which also operates an institutional broker-dealer servicing customers across a range of securities and services.
Kirk Kellogg, chief executive officer of Kellogg Group, said, “Under Knight’s management, I am confident in the long-term success of our employees and our listed companies.”
The purchase price of the acquisition was not disclosed, and its successful conclusion is still subject to closing conditions and appropriate regulatory approvals. The acquisition is expected to complete in the fourth quarter of 2010. Upon its close the DMM and LMM businesses will become part of one of Knight’s operating subsidiaries.
Kellogg Capital Markets was named DMM for Knight Capital Group on 25 May 2010 and Charles Schwab on 5 March 2010.