JP Morgan buys rest of Cazenove joint venture for $1.7 billion

JP Morgan Chase & Co today agreed to buy the 50 per cent interest it did not already own in the joint venture JP Morgan Cazenove, for $1.7 billion.

The joint venture, established in 2004, combines Cazenove's investment banking operations with JP Morgan's UK investment banking business.

The 50-50 venture between the Queen's stockbroker and US investment bank JP Morgan will provide certainty for all stakeholders, and the business will continue to operate under the JP Morgan Cazenove brand, the New York-based investment bank said in a statement.

The transaction, which was speculated by the media last month, (See: JP Morgan may takeover alliance with Cazenove) values Cazenove's ordinary shares at £5.35 each, including the closing price of £5.10 and a dividend of 25 pence per share in December 2009.

JP Morgan, the second largest US bank with assets of $2 trillion, acquired 50 per cent of Cazenove with a call option to buy the remaining stake over the next 5 years.

Widely assumed to be a stockbroker to the British Queen, Cazenove founded in 1819 by Philip Cazenove, was one of the most successful brokers and corporate advisers in London. Of the 100 biggest companies in the UK, JP Morgan Cazenove is the broker to 36 of them.

 "Our joint venture with J P Morgan has been a great success; benefiting our clients, our shareholders and our people. The agreement we have reached is a natural extension of our relationship. It builds on what we have achieved in the past five years and provides a platform for the next stage of development," David Mayhew, chairman of JP Morgan Cazenove, said.

"For all corporate clients our business will remain fundamentally unchanged - same people, same client approach, and same brand. In institutional equities, the combination of the businesses will enable us to improve and broaden our service to clients," Naguib Kheraj, JP Morgan Cazenove's CEO, said.