By the end of March 2017, Brazil’s BM&F Bovespa exchange and CETIP, the largest depository of private sector debt securities in Latin America, will have merged to be formerly known as B3 – the fifth largest stock exchange in the world with market capitalization of $13 billion.
BM&F Bovespa’s decision to take over rival clearinghouse Cetip was prompted by the two companies’ natural synergies of scale and the range of complementary products and services that each can offer. The resulting company is expected to be better suited to the challenges of today’s globally competitive market.
“This historic combination is above all a commitment with Brazil. A solid reputation, investment in people, a focus on innovation and the development of markets will remain in the DNA of the new company,” said Edemir Pinto, who will continue as B3 CEO until April 28.
“The new company will create synergy opportunities and widen the range of activities of the two companies, which complement each other not only in products and services, but also in the manner of their activities and in excellence, becoming a single company of global proportions that is a global reference point,” added Gilson Finkelsztain, Chief Integration Officer at B3 until April 30 and CEO as of May 01, 2017.
Greater capital efficiency is another benefit the new company can offer its clients – achieved for example by making use of over-the-counter and exchange-traded derivatives with the same central counterparty.
The merger also greatly strengthens B3’s business model by introducing increased revenue diversification and ensuring the consolidation of clients’ back office and treasury systems. Customers soon to reap the benefits of B3’s newly-diversified offerings include custodians, registrars, asset managers, brokerage houses and financial institutions.