) --

JPMorgan Chase's

(JPM) - Get Report

decision to buy out U.K. broker Cazenove looks like a smart move.

After days of speculation,

JPMorgan Chase

said Thursday it would acquire the remainder of the joint venture partner Cazenove that it doesn't already own for $1.67 billion (1 billion pounds).

The firms partnered up at the beginning of 2005 with JPMorgan taking a 50.01% interest in Cazenove. Under the deal, JPMorgan will combine the joint venture's cash equities and research operations with its existing franchise in Europe, the Middle East and Africa, and run the business under the JPMorgan Cazenove banner.

JPMorgan's international investment banking franchise "has become a lot stronger," says Jeffrey Harte, an analyst at Sandler O'Neill & Partners. "It's something you want to build on, not let slip away."

The joint venture's corporate finance business has already been operating closely with JPMorgan Chase in the U.K. There should be "little change to its activities" as a result of the deal. JPMorgan Cazenove will remain focused on providing strategic advice to large and small U.K. clients, as well as raising capital and delivering risk management solutions.

According to Dealogic, activity from JPMorgan Cazenove was already included in JPMorgan Chase's global investment banking rankings.

Year-to-date, JPMorgan Chase already has the top ranking for global debt and equities capital market activities as well as global syndicated loans, in terms of value, according to


. It ranks No. 3 behind

Goldman Sachs

(GS) - Get Report


Morgan Stanley

(MS) - Get Report

respectively for total deal value for global M&A advisory, this year.

That being said, some investors are concerned that JPMorgan is paying too much for the stake, particularly given that JPMorgan was able to acquire Bear Stearns and Washington Mutual last year at firesale prices.

Sandler O'Neill's Harte disagrees.

The JPMorgan Cazenove joint venture hasn't lost money, while other financial institutions have struggled throughout the crisis, Harte says. And while the price paid -- roughly $1.7 billion -- may look expensive, JPMorgan is paying roughly 12x Cazenove's earnings for the first nine months of the year, he says.

"It's certainly not a distressed price, but this is not a distressed company," Harte says.

JPMorgan Chase shares closed Thursday at $42.55, down 1.9%.

--Written by Laurie Kulikowski in New York.