NEW YORK (April 21): Virtu Financial Inc. agreed to acquire high-speed trading rival KCG Holdings Inc. for US$1.4 billion ($2 million), tying up two giant market makers as industry profits shrink.

Virtu is paying US$20 per share in cash for KCG, funding the transaction by selling US$1.65 billion in debt and US$750 million of stock, according to a statement Thursday. KCG, which fetched less than US$14 before Virtu confirmed it bid for the company in March, surged 11% to US$19.69 at 8:15 a.m. New York time. Virtu jumped 4.7%.

“That’s a tremendous amount of value being created for Virtu shareholders,” Virtu Chief Executive Officer Doug Cifu said in an interview Thursday. Virtu, which has acted as a market-maker for the majority of its existence and only recently started doing transactions for customers, is seeking to broaden its access to institutional and retail clients. KCG has hundreds of customers they arrange trades for in their agency business, Cifu said, while Virtu has fewer than 10.

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