CME Group and NEX Group have reached an agreement in which CME Group will acquire NEX.
The proposed transaction has been approved by the board of directors of both companies and is expected to close, pending approvals by regulators and NEX shareholders, in H2 2018.
According to CME the partnership will deliver better ways to trade and manage risk across futures, cash and over-the-counter (OTC) products.
CME also stated the agreement will improve trading technology and streamline access by reducing the number of touchpoints that clients need to trade across products.
The combination will also facilitate the development of post-trade services and data offerings to enhance cost-effective trading and risk management.
Following completion of the acquisition, NEX CEO Michael Spencer will join the CME Group board of directors.
Spencer will remain with the combined company as a special adviser and will also be ambassador for the combined company, working with clients, regulators and officials in Europe, Middle East and Africa and Asia.
Commenting on the partnership, Spencer said: “The combination of NEX and CME will be an industry-changing transaction. Bringing together cash and futures products and OTC services will be unique, offering clients improved access to trading, greater financial efficiencies and highly valuable data sets.”
He added: “The technology and innovation opportunities will be diverse and extraordinary. Clients will be better served. CME’s decision to choose London as its European headquarters is also a signal of tremendous support for Britain’s financial services sector.”
Terry Duffy, CME group chairman and CEO, commented: “At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, this acquisition will allow us to create significant value and efficiencies for our clients globally.”
He added: “As one organisation, we will be able to employ the complementary strengths of each company to serve a wider client base while diversifying our combined businesses across futures, cash and over the counter products and post-trade services.”
“Michael Spencer and his senior leadership team have built a world-class organisation that is at the center of capital markets. We are committed to maintaining the longstanding relationships NEX has with its clients, and exchange and clearing house partners.”
