Cazenove and JPMorgan Chase merge investment banking businesses

04 January 2005

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Cazenove Group and JPMorgan Chase & Co are to combine Cazenove's investment banking business and JPMorgan's UK investment banking business in a new company to be owned jointly. The partnership, which has been approved by the boards of both companies and is expected to take effect in the first quarter of 2005, will be called JPMorgan Cazenove. JPMorgan Cazenove will have approximately 820 employees, including about 70 who will move from JPMorgan, and will operate from Cazenove's current headquarters in the City of London. The transaction will enable Cazenove Group to release a substantial amount of capital from its current balance sheet and allow it to make a capital repayment of an estimated Â£340m to its shareholders. After an initial period of five years, the agreement provides for an annual review of the ownership structure. Thereafter, JPMorgan will have a call option to buy the remainder of the partnership from Cazenove, and Cazenove will have a put option to sell its stake in the partnership to JPMorgan. If an option is exercised, JPMorgan Cazenove will be independently valued. JPMorgan Cazenove will be led by David Mayhew as chairman and by Robert Pickering as chief executive, who retain their existing roles in Cazenove.