JP Morgan takes over joint venture from British brokerage

U.S. bank J.P. Morgan Chase & Co. said Thursday it has bought full control of J.P. Morgan Cazenove in a 1 billion pound ($1.67 billion) deal with its joint venture partner, the venerable London financial house Cazenove Group Ltd. J.P. Morgan Cazenove, established five years ago, will continue to operate under that name, with David Mayhew remaining as chairman. CEO Naguib Kheraj will stay on to oversee the integration, J.P. Morgan said. "For all corporate clients our business will remain fundamentally unchanged: same people, same client approach, and same brand," Kheraj said. "In institutional equities, the combination of the businesses will enable us to improve and broaden our service to clients." Cazenove shareholders will be paid 5.35 pounds per share for their 49.99 percent stake in the joint venture, said J.P. Morgan, which exercised an option to buy out its partner. The deal is expected to be completed early next year. The joint venture has felt the impact of the recession, with full-year revenue down 10 percent in 2008 to 394.9 million pounds and pretax profit down 15 percent to 134.5 million pounds. Last year, it was involved in financing Banco Santander's takeover of British mortgage lender Alliance & Leicester, Barclays capital raising of 7.05 billion pounds, and Standard and Chartered Bank's 1.8 billion pounds rights issue. Cazenove, reportedly the stockbroker to Queen Elizabeth II, built a reputation for discreet service to elite clients. Cazenove was founded in 1823 — 14 years before the birth of the legendary U.S. financier John Pierpont Morgan. It began as a partnership between Philip Cazenove, by the grandson of a Huguenot who fled religious persecution in France in 1685, and his brother-in-law John Menet. It evolved into one of Britain's most respected brokerage and financial advisory firms, and was involved in many of the privations of nationalized industries in the 1980. The company incorporated in 2001.