Stifel to Acquire German Brokerage MainFirst Bank in Preparation for Brexit

The deal will see the equity research unit of MainFirst combining with Stifel’s presence in the UK market.

London-based investment bank Stifel Europe, a subsidiary of Stifel Financial Corp, has agreed to buy German brokerage MainFirst Bank. The acquisition will allow Stifel to scale up its German and Swiss equity research business.

According to a statement released by the two firms on Tuesday, the acquisition is in preparation for Brexit, with the UK set to leave the European Union in just over four months on March 29, 2019.

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Specifically, the statement said: “MainFirst carries a full German banking license, enabling Stifel to continue offering corporate advisory, brokerage, and investment banking services and clear and settle secondary equity and fixed income trades post-Brexit.”

The deal will result in the equity research unit of the German broker combining with Stifel’s presence in the UK market. From this, a pan-European platform will be created, with distribution power and local expertise.

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The transaction includes MainFirst Bank, MainFirst Schweiz, and MainFirst Securities US Inc. The deal does not affect MainFirst Asset Management, which separated from the brokerage business earlier this year.

Acquisition Expected to Be Completed in q1 2019

The move is expected to close in the first quarter of next year. The financial details, such as the value of the acquisition, has not been disclosed. However, MainFirst did say that senior management would remain in their current positions after the merge.

Commenting on the acquisition Eithne O’Leary, president of Stifel Europe, said: “Given the evolving European regulatory environment and changing market dynamics, we will continue to pursue strategies that enable us to best serve current and future clients with a wider range of products.”

Brexit Preparations Are Underway

With Brexit fast approaching, financial institutions are making final preparations for the split. Bafin, a German financial watchdog, said in August that the country was processing more than 25 banking licenses in the wake of Brexit.

Furthermore, financial regulators such as the European Securities and Markets Authority (ESMA), Cyprus Securities and Exchange Commission (CySEC) and Bafin itself have also been warning financial institutions to be ready for the worst case scenario, a so-called “hard Brexit.” This means firms wanting to continue to offer their products and services need to have a licensed entity in one of the 28-EU states.

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