Birth of world's biggest financial exchange
July 11, 2007
THE world's biggest financial exchange is born after shareholders of the Chicago Board of Trade and Chicago Mercantile Exchange voted to merge.
The friendly CME bid — worth an estimated $US11 billion ($A12.8 billion) — was accepted by an overwhelming majority of CBOT shareholders, preliminary results showed.
"It's the biggest trade in the history of Chicago and it's one of the few trades where both sides win," CBOT chairman Charles Carey said.
CBOT shareholders had been hit with a fierce takeover campaign by IntercontinentalExchange (ICE), which operates the New York Board of Trade and the London-based International Petroleum Exchange.
ICE failed to boost its offer after CME sweetened its bid for the third time last week, allowing CBOT shareholders to own some 36 per cent of the combined company, up from 35 per cent in the prior agreement. That extra boost was enough.
The transaction is expected to be completed in the coming days, but it will be 12 to 18 months before the two exchanges are fully integrated.
The combined company will be called CME Group Inc, a CME/Chicago Board of Trade Company. Its market value will be some $US30 billion, about 50 per cent bigger than its closest rival, NYSE Euronext, formed by the merger of the New York Stock Exchange and the pan-European bourse.
The Chicago market will be "the world's largest and most diverse exchange, providing products in all major benchmark asset classes", the companies said.
"This is the biggest transaction in the history of the exchange business," CME chairman Terry Duffy said.
The hard-fought battle came amid a growing role for futures and derivatives in global financial markets.
COMMENTS: This sounds like good news..I think anything that they invent or re-invent BIGGER is good news...Example, a bigger plane, a bigger bus, a bigger stadium, a bigger bank, etc...My question is, how productive to subscribers/investors/traders it will be..Will it be easier or harder than before or just more spacious..I don't know nothing about stock market/exchange but i look at it as betting on Pick3 from 0 to 9..If they merge normally it will mean increasing the field of betting or the range from 0 to 9 to 0 to 13, etc...That's how i view it, and that's why i wonder if is going to be like that, because if is going to be like that they shouldn't have merged..I honestly don't know what this all mean...I hope is good for the U.S economy and for its subscribers/investors/traders..By investors i mean people that bet/trade on the Stock market...I just hope that whenever they merge into making the biggest exchange in the world, that it will make the whole U.S.A be trading/betting/investing even the homeless...