Societe Generale is to acquire most of the futures activities of Jefferies’ Bache business. Under the terms of that agreement, a majority of the client activities currently serviced by Bache will be transferred to Societe Generale.
The transaction, which remains subject to closing conditions in the agreement, is expected to close in the second quarter of 2015. From now through the transaction’s close, Jefferies will exit remaining Bache futures and commodities activities.
Jefferies estimates this transaction and winding up the balance of the Bache business will result in one-time costs of about USD66 million after-tax, of which USD23 million are non-cash and the majority of the balance is compensation, severance and technology-related. Exiting this business is expected to be accretive to Jefferies’ future earnings.