The merger agreement between trading technology providers GL TRADE and SunGard was industry-driven and not for financial reasons, according to the firms.
SunGard today announced a “firm commitment” to acquire the 64.51% of the shares from the majority shareholders of GL TRADE.
“We had several offers, including from private equity funds and industry bidders,” Tatiana Liber, investor relations for GL TRADE, told theTRADEnews.com. “The rationale is growth in three areas, product, geography and the GL management team and culture”
Both companies already have a global product offering spread but saw potential synergies. “GL TRADE has a connectivity offering 133 global exchanges, which is something that SunGard’s cross asset trading solutions can make use of and combine,” said Liber. “In addition, when you look at the geographical breakdown of business from both firms, there is clearly a match here.”
In 2007, 69% of GL TRADE’s business came from Europe, 16% from America and 15% from Asia. In contrast, the majority of SunGard’s business (73%) came from the US, 25% from Europe and 2% from Asia.
Liber stressed that the deal was not struck because of problems at GL TRADE. “The rationale behind the deal is to grow the overall business. This is not a turnaround situation and we expect it to be business as usual.”
The deal will be completed after the administrative and legal stages, which include consultation with the work council in France and the antitrust procedure. Following this, there will be a public offering of the remaining shares that are not purchased by SunGard.