Fortis is to acquire Chicago-based O'Connor & Company, a specialist in clearing services on US equity, futures and options markets.
Fortis will combine its existing Chicago clearing operations with O'Connor, more than tripling its size and presence in the market. O'Connor & Company President and CEO William C. Floersch will become CEO of the combined organisation, which will operate under the O'Connor name until full integration of the two firms is completed, after which it will assume the Fortis name. The two firms together will employ approximately 170 people in the US.
Floersche said: "Derivatives trading volumes are expanding rapidly, and the combined firm of O'Connor and Fortis Clearing Chicago will place us in a much stronger position to service our current clients and capture additional business with a much broader array of products. With the financial strength of Fortis, we hope to become an even more attractive clearing choice for clients both in and outside the US."
Fortis Clearing is part of the Merchant Banking division of Fortis Bank. It is one of the largest independent third party clearers in Europe, Asia/Pacific and the US and offers clearing services for the derivatives, equities, bonds and commodities markets. In addition to Chicago, Fortis Clearing has offices in Amsterdam, Frankfurt, Hong Kong, London, Singapore and Sydney with more than 500 employees worldwide. It has General Clearing Memberships in 21 exchanges and access to other major exchanges through third party relationships.
O'Connor & Company was established in Chicago in 1959 by Edmund and William O'Connor, pioneers in the derivatives industry who helped launch the Chicago Board Options Exchange. O'Connor & Company also has offices in Summit, NJ and San Francisco.
Fortis started its US operations in 2001 with Fortis Clearing Chicago to provide clearing services on the US futures exchanges to Fortis's global clients as well as to Chicago-based clients.
"We expect O'Connor & Company's outstanding people, client relationships and market knowledge will add significantly to our Chicago operations," said Frans Demmenie, CEO of Fortis Securities & Fund Solutions, part of Fortis Merchant Banking. "For Fortis, this acquisition is a key part of our global growth strategy, and an important expansion of our US presence. Our goal is to provide our clients global reach with local focus and expertise."
The acquisition is expected to close in 60 to 90 days, subject to regulatory review and acceptance from exchanges and clearing organisations. According to Floersch and Russell Levens, CEO of Fortis Clearing Chicago, the two operations have minimal overlap in staff. The two businesses will operate separately until closing, then begin an integration process with the move of Fortis Clearing Chicago's staff into the larger O'Connor & Company offices at 175 W. Jackson Blvd. during the first quarter of 2006.
"We are extremely proud to join forces with O'Connor & Company," said Levens, who will become Chief Commercial Officer and assume client management responsibilities for the combined organisation. "O'Connor is a recognized leader in this industry with a great reputation. We share a commitment to customer service and together will provide direct access to more markets. This acquisition gives Fortis access to the US equity and equity derivative markets and significantly raises our profile in agricultural commodities."
The transaction will have no material impact on Fortis' net profit per share.
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