Delay for Tullett and Icap merger amid regulator's oil warning

The £1.1 billion merger of Tullett Prebon and Icap’s voice broking operations could attract more scrutiny from competition authorities unless they come up with a plan to reduce their combined dominance of the oil broking market.

The Competition and Markets Authority said it would hold an in-depth Stage 2 investigation unless Tullett and Icap gave undertakings that would satisfy its worries.

This is likely to mean selling off a fairly small part of the combined oil trading desks.

The regulator cleared the deal on all 19 other areas in which the brokers trade but said that in the oil market there were a limited number of brokers and that electronic trading, which will be Icap’s business going forward, was not so developed as in other markets.

Both Icap and Tullett said they were sure that they could come up with a solution to satisfy the CMA and “confident” that their deal would still be completed by the end of the year.

Tullet shares fell 6.3p. or 2%, to 318.9p while Icap’s were up 1.1p at 435.2p.