Nomura to Acquire Instinet

Ivy Schmerken, Wall Street & Technology

Nomura Holdings, the Japanese financial services conglomerate, has agreed to acquire Instinet Inc., the global agency broker, in an all cash transaction, according to today's announcement. The purchase price was not disclosed.Instinet is majority owned by Silver Lake Properties, the private equity firm that bought Instinet last April at the same time that INET, Instinet's electronic communications network, was sold to The Nasdaq Stock Market.

According to Aite Group Senior Analyst Brad Bailey, who issued a commentary this morning, the proposed acquisition "is a strategic move by Nomura to pick up one of the top independent agency brokers in the algorithmic and direct-market access space." Bailey also noted that Instinet would provide Nomura with instant algorithmic trading and electronic trading reach in the U.S., Europe and expanded abilities in Asia. Instinet also has an electronic reach out to 28 countries, combined with its strength in crossing networks in the major market centers, wrote Bailey.

"Instinet is a true pioneer in the field of electronic trading, offering world-class front-end trading products, crossing platforms and algorithms," stated Hiromasa Yamazaki, senior managing director of Nomura Securities, in the release.

Aite Group's Bailey predicted that as the battlegrounds for algorithmic trading shift from U.S. shores to those in Europe and Asia, the combination of Nomura with Instinet-developed technology and existing connectivity to 53 markets in 30 countries will give Nomura great agility and speed to gear up in many markets.

The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2007. Instinet will be operated as a wholly owned subsidiary and brand of Nomura offering agency execution services to institutional clients around the world, said the release. Senior management, including CEO Edward Nicoll, will continue to run the firm. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio