Reports follow wave of proposed, failed and successful mergers among exchanges worldwide
US derivatives exchange operator CME approached Deutsche Börse about starting merger talks in the latest of a series of merger proposals and negotiations involving major exchanges worldwide, according to media reports.
CME sought to start negotiations for a merger with the German exchange late last year after the announcement of commodity futures exchange IntercontinentalExchange’s (ICE) plan to take over NYSE Euronext, according to a report by Bloomberg News, which cites four unidentified people familiar with the talks. The Financial Times reports similar information, citing two people the newspaper does not identify.
Deutsche Börse shares jumped by as much as 10 percent in trading after the reports but pared gains after the German company issued a statement saying no talks are ongoing with CME. Still, the shares closed 5.6 percent up as investors speculated that some form of merger may happen. CME has issued no statement about the media reports.
‘Deutsche Börse is not in merger negotiations with CME Group,’ the German company says. ‘As repeatedly communicated, Deutsche Börse Group’s primary strategic focus is on organic growth, mainly by expanding its business into growth regions in Asia, extending its services for unsecured and unregulated markets, and expanding its combined market data and IT business.’
The reports come amid a wave of successful and attempted mergers of exchanges, including the $8.2 bn NYSE Euronext deal, which valued the exchange group 38 percent above its market price at the time. The announcement of the planned takeover of NYSE Euronext, which will intensify competition with ICE and Deutsche Börse if approved, came a month after a failed offer for NYSE Euronext by Warren Buffet’s Berkshire Hathaway.
Just over a year ago, US authorities blocked a planned buyout of NYSE Euronext by ICE and NASDAQ, saying the new group would dominate US stock listings. Around the same time, European regulators also blocked a merger attempt between Deutsche Börse and NYSE Euronext on the grounds the merged group would gain a monopoly on trading in interest rate derivatives in Europe.
Early last year, Hong Kong Exchanges & Clearing (HKEx) agreed to buy the London Metal Exchange for around $2.2 bn in HKEx’s first international acquisition, beating ICE in the bidding. Some $50 bn has been spent or offered in mergers between exchanges worldwide since 2010, according to Bloomberg data.
