The Leucadia National Corp. (NYSE:LUK) has just announced that it intends to purchase the Jefferies Group, Inc. (NYSE:JEF) in a $3.6 billion deal. According to the announcement, Jefferies shareholders are expected to receive .81% of a Leucadia share per Jefferies share they own. That’s approximately a 24 percent premium of Jefferies’ Friday closing price, and it values the company at around $3.7 billion, a significant increase in Friday’s value of the company at $2.9 billion. Executives of Jefferies and Leucadia expect the deal to close in the first part of 2013, if the shareholders of both companies approve it.

Leucadia National corp

Leucadia National Corp. (NYSE:LUK) already owns approximately a 28 percent stake in Jefferies Group, Inc. (NYSE:JEF). The New York firm is a conglomerate, with deep pockets and holdings in a variety of industries, from timber to wine to beef processing. Leucadia is known within the industry as “Baby Berkshire” because of how similar it is to Berkshire Hathaway, Inc., a much larger company that’s owned by billionaire Warren Buffet.

In recent years, Jefferies has been one of the fastest-growing U.S. securities firms. The company has been pulling investment bankers and traders from larger Wall Street rivals.

This morning, company executives sayafter the deal, Jefferies Group, Inc. (NYSE:JEF) will be Leucadia’s largest business and will keep operating in its current form as a global investment firm. Jefferies and Leucadia National Corp. (NYSE:LUK) will each retain their own credit ratings, and Jefferies’ current debt will continue to be outstanding.

Leucadia National Corp. (NYSE:LUK)’s current president and co-founder, Joseph S. Steinberg, is expected to become the combined company’s chairman, while current Jefferies Group, Inc. (NYSE:JEF) chairman and CEO, Richard B. Handler, is expected to become the chief of Leucadia. Leucadia’s other co-founder and current chairman and CEO, Ian M. Cumming, is expected to retire when the deal closes, although he will continue to be a director.