Société Générale and Calyon announced that they signed a final agreement to merge the brokerage activities currently carried out by their respective subsidiaries, Fimat and Calyon Financial.

The resulting entity, Newedge, will be controlled equally by Société Générale and Calyon (the investment banking arm of the Credit Agricole Group) and will have bank status. It will be headquartered in Paris, and is expected to have a combined staff of around 3,000 located in the world’s main financial centres.

The operational launch of the new entity is scheduled for early 2008, subject to the approval of supervisory authorities.

The firms say that Newedge will rank as a world leader in execution, in particular electronic execution, as well as in clearing derivative products traded in over 70 organized markets in the USA, Europe and Asia-Pacific. On a pro forma basis, as at December 31, 2006, the combined entity handled more than 1.3 billion contracts, with sales of over €1 billion.

In addition to its core business as a Futures Commission Merchant, the new entity will continue to offer a range of complementary execution services on OTC markets and on all the spot markets, including money market instruments, bonds, equities, FX and tangible commodities.

Newedge will provide a comprehensive prime brokerage offering, positioned as an alternative to the services offered by investment banks to their institutional customers, the firms note. “Generating diversified revenue streams from banks, brokers, firms and management companies including hedge funds, the new entity will thus meet the increasing demands of a broader customer base, with a wider spectrum of products and access to increasingly substantial sources of liquidity,” they add.