Chicago's two pre-eminent derivatives exchanges yesterday unveiled an $8 billion (€6.4 billion) merger plan that will increase the momentum for consolidation in the financial exchange sector by creating a platform with unmatched global reach.
A combination of the Chicago Mercantile Exchange (CME) and the smaller Chicago Board of Trade (CBOT) would create the world's largest derivatives exchange. It would also provide the merged group with an estimated annual $125 million in synergies to fund expansion into Europe and Asia, as well as fast-growing areas such as credit derivatives and foreign exchange, which remain dominated by over-the-counter trading.
Both companies have courted the Asian market, and the CBOT last month launched a commodity exchange in partnership with Singapore's SGX.
The announcement follows a year of talks and flirtations with rival exchanges and represents an all-American solution at a time when the competitiveness of US capital markets has come under pressure from regulatory changes that have driven users overseas.
The bold move comes two years after the CBOT rejected an approach from the CME in favour of a stock market listing last year. - (Financial Times service)
