Bank of China has notified competition authorities that it has agreed to take over Goodbody Stockbrokers, almost nine months after a deal with another group of Beijing-based companies fell through.
The Competition and Consumer Protection Commission said in a post on its website on Thursday that it was notified the previous day of the plan, which needs competition and regulatory approval.
Bank of China is planning to carry out the deal through its UK unit, which opened an Irish branch two years ago.
The transaction is valued at an initial €150 million, including about €45 million of cash that Goodbody received last year from the sale of the Irish Stock Exchange, in which it held an almost 27 per cent stake, to Euronext.
That’s the same price at which Goodbody management and Kerry financial services group Fexco, which owns a 51 per cent stake, agreed to sell the brokerage and wealth management group last year to a Chinese consortium, led by Zhong Ze Culture Investment Holdings.
The previous agreement with the Zhong Ze Culture Investment consortium fell through in January when the sellers became concerned about the changes to the make-up of the group following an initial agreement in the middle of 2018.
Performance targets
The value of the new deal may increase over the next three years, subject to certain performance targets being met. Separately, staff at Goodbody, which employs about 310 people, were told that a share-based incentive scheme will be set up in the company.
Sources were not able on Thursday to confirm the details of that planned scheme. The management team at Goodbody, led by management director Roy Barrett, will remain in place.
It is understood that Bank of China envisages growing both the investment banking and wealth and management arms of the business, and expanding its UK operation and moving into mainland Europe in time.
Sources said the expectation is that the deal may prove easier to secure Central Bank approval, as the acquiring entity is fully regulated in the UK. It is envisaged that it will close in the second quarter of next year, they said.
Remain independent
Goodbody will remain independent operationally from Bank of China UK and there will be no sharing of data, they said.
Consolidation elsewhere in the sector in recent years – as the sector grapples with the rising cost and complexity of regulation – includes Cantor Fitzgerald Ireland’s purchase last year of Merrion Capital, and Brewin Dolphin’s move earlier this year to buy Investec’s Irish wealth management business.
Davy and Irish Life had also been involved in bidding for Goodbody in recent months.
