Old Mutual hopes stockbroking merger will 'fill gap left by European banks'

Two of Britain's best known stockbroking names, Albert E Sharp and Greig Middleton, are to disappear in a reorganisation following last month's £525m takeover of Garrard Group by Old Mutual, the South African life insurance group.

Following the change of ownership, Old Mutual is to merge Greig Middleton's stockbroking operations with those of Albert E Sharp to create a new UK focussed broking business. Old Mutual bought the regional stockbroker Albert E Sharp in 1998. The new firm, which will operate under the banner of Old Mutual Securities, will employ 120 staff in London and the regions specialising in supporting an advisory business targetted at small and medium-sized quoted companies.

Old Mutual hopes it can plug the gap in coverage left as a result of the growing trend by the foreign-owned big City brokers to concentrate on European big cap stocks at the expense of traditional UK stocks.

Last year Credit Lyonnais, which as Laing & Cruickshank had been one of the best known UK corporate brokers in the City, sacked a number of well-regarded broking analysts as part of a decision by its French management to focus on pan-European sectors. Panmure Gordon is undergoing similar changes now it is owned by Germany's WestLB, while Charterhouse is up for sale since its parent CCF of France was acquired by Britain's HSBC.

Ed Warner chief executive of Old Mutual securities said: "I don't think either firm quite had critical mass. Putting them together gives us a central position in the middle market. We are making a virtue of being a pure UK domestically focused house." Albert E Sharp acted as adviser to the Phoenix consortium which mounted a rescue bid for Rover cars.

The firm will operate under the new banner from the end of this month, providing research on 300 companies in 15 sectors. Its corporate client list will cover 100 companies.

Since being taken over, Albert E Sharp has expanded out of its traditional concentration on Midlands engineering companies into new economy sectors. Greig Middleton's clients include the health clubs group LA Fitness, Applied Optical Technologies and Fibernet.