Goldman Sachs Group Inc. said Monday that it will pay $531 million for Hull Group Inc., giving the No. 5 U.S. securities firm a wider role in electronic markets.
Chicago-based Hull buys and sells futures, options and stocks electronically on 28 exchanges in nine countries. It's pushing for a greater share of such trading in the U.S. as more trading takes place on computers rather than exchange floors.
"Clearly the [move] around the world is for stock exchanges to go to more electronic trading," said Bob Steel, co-head of equities for New York-based Goldman. "We wanted to be in the driver's seat and work with the leader."
The share of Hull's net revenue that comes from electronic trading grew to 67% last year from 12.5% four years earlier, according to the company, which has 250 employees, including software developers and traders. It had 1998 pretax net income of $40.6 million on revenue of $103.1 million.
Hull holds 15% of the European market for equity index options contracts, compared with 7% for the U.S., Goldman said. It also has 17% of Europe's individual equity options market, compared with 1% for the U.S.
Goldman said the acquisition, to be completed this fall, will be neutral or add to earnings this year. Goldman shares rose $1.13 to close at $68.38.