Tuesday, July 10, 2007

Chicago Exchange Merger May Bring More Deals (New York TImes)

The Chicago Mercantile Exchange won shareholder approval to acquire CBOT Holdings, the parent of the Chicago Board of Trade, for $11.9 billion.

The vote appeared to end a bidding war with the IntercontinentalExchange and left industry experts speculating about future deals in the rapidly consolidating financial exchange industry.

The combined Chicago company, to be called the CME Group, could try to acquire exchanges in New York, London or elsewhere, analysts told The Associated Press. Judging from the Chicago exchanges’ focus on becoming global, one analyst said the London Stock Exchange was a logical candidate. Another suggested a deal with the New York Mercantile Exchange made sense.

The Chicago Tribune considers the next move for The New York Stock Exchange, which has also been rumored to be interested in the New York Merc. It noted that NYSE’s chief executive, John Thain, has made it clear he does not plan to cede the futures arena to the pit traders of Chicago.

“It’s very difficult to compete head to head in existing contracts, so I think if we’re going to develop a bigger presence in the U.S. in the areas that are currently in existence, I think it has to be by acquisition,” Mr. Thain said at an analyst briefing last month, according to the paper.

Bloomberg News cites Atlanta-based IntercontinentalExchange, the losing bidder for CBOT, as a potential takeover target for the New York exchange’s parent company, NYSE Euronext.

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