The Competition and Markets Authority, UK’s competition watchdog, has cleared CME Group’s acquisition of NEX Group, allowing both companies to finalize the £3.9 billion ($4.96 billion) deal.
CME Group will use the opportunity to the NEX name and brand but will continue to operate its individual Markets and Optimisation businesses as sub-brands including BrokerTec, EBS, Traiana and TriOptima. The merger will enable investors to access cash and futures trading and over-the-counter services through one provider for the first time.
CME Group will preserve NEX’s existing market structures but will use its technology, futures trading and product development expertise to strengthen and scale its businesses. The merger is expected to deliver new trading opportunities and simplify access by reducing the number of touchpoints to trade across platforms, and the combined company’s post-trade services expertise will strengthen its compression, reconciliation and processing businesses.
Terry Duffy, Chairman and Chief Executive Officer of CME Group, commented: “We are extremely pleased to complete this acquisition and welcome NEX into CME Group. By combining the strengths of our two leading organizations, CME Group is uniquely positioned to address the changing needs of market participants worldwide. Together, we will provide efficient access to futures, cash and OTC markets, as well as post-trade services and data offerings that will further support cost-effective trading and risk management. Michael Spencer and his team have built NEX into a world-class company. Our combined organization will preserve the existing market structure of our various businesses while also creating efficiencies and streamlining technology for our clients. With a significantly expanded global footprint, we are committed to ensuring a smooth transition for all customers and partners going forward.”
Michael Spencer, founder of NEX and new member of the CME Group Board of Directors, said: “Today NEX becomes part of the world’s leading exchange group. Together we will continue to innovate and deliver industry-leading technology to our customers and help to drive the continued development of the financial markets. I am excited about the future for this combined group and the many new opportunities that it will provide for our employees, customers and the wider marketplace. I look forward to working with Terry, the CME Group Board of Directors and the combined team from both CME and NEX as we shape and grow the company.”
CME Group expects the acquisition to produce a pro forma 2017 annual revenue of $4.3 billion, adding to the run-rate cost synergies of $200 million annually by the end of 2021.