Jefferies to buy Prudential commodities business

NEW YORK (Reuters) – Jefferies Group (JEF.N: Quote, Profile, Research) said on Thursday it would buy Prudential Financial’s (PRU.N: Quote, Profile, Research) global commodities and derivatives trading business for $430 million.

The deal is Jefferies’ latest push to expand into new lines of business to better compete with larger Wall Street firms like Goldman Sachs and Morgan Stanley.

The business, Prudential Bache’s Global Commodities Group, is a broker for listed derivatives, including futures and options. It also clears trades, and does over-the-counter trading in foreign exchange, base and precious metals, and energy and agriculture swaps.

The business posted 2010 revenue of about $220 million and is profitable, Jefferies said in a statement.

Last month, Jefferies reported stronger-than-expected earnings growth by nabbing market share in trading and investment banking. The company is a fraction of the size of Goldman or Morgan Stanley by market capitalization or revenue, but has had success in seizing new customers from bigger peers, Jefferies Chief Executive Richard Handler has said.

Alex Ladouceur, president of Prudential Bache Commodities, will continue in that role at the enterprise, which will be renamed Jefferies Bache.

The business, which has offices in London and New York, was founded in 1879. Prudential is exiting the commodities trading area to focus on its core businesses of insurance, retirement and asset management.

The group will have more than 400 employees, Jefferies said. The company has been aggressively hiring to build up certain businesses, including fixed-income trading and investment banking.

As of February 28, Jefferies had 3,082 employees globally, compared with 2,628 at the end of 2009.

(Reporting by Lauren Tara LaCapra, Editing by Maureen Bavdek)

Jefferies to buy Prudential commodities business