Any tots on this? === Credit Agricole, Societe Generale May Merge U.S. Futures Units July 31 (Bloomberg) -- Credit Agricole SA and Societe Generale SA, France's first and third largest banks, may merge their U.S.-based futures businesses, said two people familiar with the talks. The joint venture formed by Credit Agricole's Calyon Financial and Societe Generale's Fimat USA would be the third- biggest futures brokerage by customer funds, based on data from the U.S. Commodity Futures Trading Commission. They are sixth and eighth today, according to the data. Calyon and Fimat trade futures and options based on interest rates, metals and energy commodities, operating on exchange floors in Chicago, New York and London. Getting bigger may make it easier to attract customers and keep costs in line with rivals that are also expanding, said Robin Down, an analyst with HSBC Holdings Plc. ``I can see the logic behind it,'' said Down, who is based in London and tracks the French banks. ``Scale is important,'' he said. ``There is so much investment required in these businesses you have to be as big as possible.'' UBS AG, Europe's largest bank, in May agreed to buy ABN Amro Holding NV's futures business for $386 million, which will push the bank past Goldman Sachs Group Inc. as the largest futures broker by customer funds. Man Group Plc agreed last week to buy 70 percent of the U.S. futures unit of Eurex AG for $23.2 million and in December bought bankrupt Refco Inc.'s futures operation. Trading of derivatives is at record levels. The number of futures contracts traded worldwide last year was up 12 percent from 2004, according to the Futures Industry Association. Equities trading on the New York Stock Exchange rose 10 percent last year, and the number of shares traded on the Nasdaq dropped 0.5 percent, according to the World Federation of Exchanges. Fifty-Fifty Venture Fimat and Calyon are negotiating over the value of the two units and may complete the process in two to three weeks, said the people, who asked not to be named because the talks are confidential. The owner of the unit determined to be of lesser value would probably make up the difference to allow for creation of a fifty-fifty venture, the people said. Barry Neumann, spokesman for Chicago-based Calyon, did not respond to phone calls and written questions. Fimat USA spokeswoman Nachamah Jacobovits in New York declined to comment. Fimat is probably stronger in derivatives, while Calyon is better in equities, said Christopher Wheeler, an analyst in London with Bear Stearns Cos. A ``ballpark'' estimate of the value of the units is $150 million to $200 million each, he said. Wheeler also said he was not convinced that a joint venture could work: ``At the end of the day, one should sell to the other.'' Rankings A combination of Calyon and Fimat would have $11.7 billion in customer funds on deposit, according to the data from U.S. regulators. UBS, upon completion of the ABN Amro acquisition, expected this quarter, will have $13.2 billion in customer funds. Goldman Sachs has $11.8 billion. The data, from May 31, doesn't reflect non-U.S. operations. The Paris-based banks don't release revenue or profit figures for their futures units. Credit Agricole reorganized the Calyon investment bank, which owns Calyon Financial, after the 16 billion-euro acquisition of rival Credit Lyonnais in 2003. The investment bank has shed more than 3,000 jobs since the end of 2002. Calyon Financial has 390 employees, according to Hoover's Inc. Fimat employs more than 700, spokeswoman Jacobovits said. ``Credit Agricole's basic issue with its investment banking business is it's starting from a relatively small level,'' HSBC's Down said. A joint venture would probably be ``more interesting to Credit Agricole, considering their need to build up these operations more than Societe Generale.''