There's a huge merger in the City of London that shows just how much has changed since the 2008 crisis

Inter-dealer broker Tullett Prebon is merging with the phone broking operations of rival ICAP to “create the largest player in the industry,” according to a regulatory filing on Wednesday.

The pair are creating a “global hybrid voice broking and information business” featuring ICAP’s technology and broking platforms. Tullett is issuing new shares to pay for the deal and ICAP and its shareholders will own 56% of the combined venture.

ICAP and Tullett Prebon used to be bitter rivals in the City of London. Both are interdealer brokers, companies that sits between investment banks helping find buyers and sellers of large securities and illiquid assets like swaps at other investment banks. Banks don’t like to do it themselves in case they give away their positions.

The phone broking division are the brokers themselves who sit on the landlines all day ringing up bankers and pitching them deals. ICAP’s data business iSwap is also included in the deal.

Tullett Prebon is painting this deal as the creation of a new City of London giant, with combined revenues of £1.5 billion. But really this is a merger of necessities.

Since the 2008 financial crash business has fallen off a cliff for brokers, as regulators around the world rein in investment banking activity. Banks are making many fewer exotically structured bets and wagers interdealer brokers like to shift.

Things haven’t been helped by the growing influence of financial technology, or fintech, in the world of finance.

News of the deal first broke on Friday, the same day Tullett issued a profit warning. These are tough times in the world of brokerage firms and this merger by no means puts it in the clear.

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