American investment bank Jefferies
Hoare Govett had been one of the most historic and prestigious brands in British stockbroking for much of the 20th century, along with Cazenove, but analysts felt its brand value had been diluted after it got absorbed into ABN AMRO.
Hoare Govett is one of the oldest and most distinguished franchises in corporate broking. Joining forces affirms Jefferies' deep and long-term commitment to serving UK corporate clients, Jefferies International Ltd president David Weaver said in a statement.
The takeover will see around 50 staff join Jefferies' London office including current Hoare Govett managing directors. The business will be re-branded as Jefferies Hoare Govett.
Hoare Govett has been serving UK companies for more than 100 years and can help Jefferies pick up more corporate deals in a marketplace dominated by larger British and Wall Street banks.
In November, Jefferies expanded its European fixed income team and Hoare Govett will add to its presence in the equities market.
RBS' INVESTMENT BANKING RETREAT
RBS, 83 percent owned by the British government after a state bailout during the 2008 credit crisis, acquired the Hoare Govett business as part of its disastrous acquisition of Dutch bank ABN AMRO.
RBS added that the deal was expected to be completed by the end of the first quarter.
The sale of Hoare Govett is part of a drastic cut of RBS' investment banking operation, known within the company as 'GBM' (Global Banking & Markets).
RBS has come under pressure from Britain's Conservative-led coalition government to focus more on retail banking rather than its riskier investment banking arm.
The government has stepped up the pressure since the start of the year on RBS, which has come to symbolise for many in Britain the worst excesses of the financial crisis.
The chief executive and chairman of RBS waived their 2011 bonuses following intense political pressure, while Britain also stripped former RBS boss Fred Goodwin - who led the ABN AMRO takeover which nearly led to the collapse of RBS - of his knighthood.
Last month, RBS said it would cut another 4,450 jobs as part of its retreat from investment banking.
These would include 3,500 job cuts at its investment banking division, which would see RBS exit cash equities, corporate broking, equity capital markets and mergers and acquisitions businesses. The cuts come on top of 2,000 at the investment bank in the second half of 2011 and account for more than a quarter of the unit's staff.
RBS said it was in active talks with other parties interested in acquiring other parts of its investment banking business, and sources with knowledge of the matter have told Reuters that Asian, Middle Eastern and Australian banks could be interested in those assets.
The exit of RBS from investment banking was inevitable. As a state owned institution and political football, strategic decision making is subject to different influences, said Alex White, partner at accountancy and consultancy firm BDO LLP.
RBS nearly collapsed in the aftermath of its ill-timed ABN AMRO takeover. Its takeover of the Dutch bank came just before the onslaught of the 2008 credit crisis, and RBS had to be bailed out with 45 billion pounds of British taxpayers' money.
RBS shares closed up 4.2 percent at 27.74 pence on Wednesday, still well below the average 49.90 pence price at which the British taxpayer acquired its stake in the bank.
(Reporting by Sudip Kar-Gupta; Editing by Jon Loades-Carter and Elaine Hardcastle)