NEW YORK (Reuters) – Barclays Plc (BARC.L) agreed on Monday to acquire the Bear Wagner Specialists LLC operations from JPMorgan Chase & Co (JPM.N), a move that will leave the New York Stock Exchange with five designated market makers.
The terms were not disclosed by NYSE Euronext (NYX.PA) (NYX.N), which announced the transaction. The Wall Street Journal said the purchase price is about $30 million. Barclays and JPMorgan declined to disclose the terms.
The transaction will create the largest designated market maker on the Big Board, representing more than 850 listed issues, including 109 members of the Standard & Poor’s 500 .SPX, and about 28 percent of average daily trading volume.
Barclays plans to merge Bear Wagner with its own specialist business, which it took on when it bought part of Lehman Brothers Holdings Inc (LEHMQ.PK) in September. A closing is expected in April, pending regulatory approvals.
“We’ve found a lot of success, both as a market maker and as a provider of liquidity,” said William White, a managing director at Barclays Capital who runs the unit’s market making business, in an interview.
Specialists operate on exchange trading floors and make markets by buying and selling shares, sometimes by committing their own capital. Their importance is declining as trading migrates to electronic platforms.
Barclays said it is the specialist for companies including Hewlett-Packard Co (HPQ.N) Pfizer Inc PFE.N and Walt Disney Co (DIS.N), while Bear Wagner makes markets for Alcoa Inc (AA.N), Bank of New York Mellon Corp (BK.N) and Procter & Gamble Co (PG.N).
Bear Stearns Cos had paid $625 million for the specialist firm Wagner Stott Mercator LLC in 2001 and took a $225 million writedown in 2007. JPMorgan took control of the unit when it bought Bear Stearns last May.
Other companies with specialist operations include Bank of America Corp (BAC.N), Goldman Sachs Group Inc’s (GS.N) Spear, Leeds & Kellogg Specialists LLC, privately-held Kellogg Group LLC, and LaBranche & Co Inc (LAB.N). (Reporting by Jonathan Stempel; Editing by Andre Grenon)