August 18, 2021 - the CME has this afternoon issued a very brief but robust denial that it is in conversations to acquire rival Chicago derivatives exchange Cboe Global Markets.
The statement reads: ""CME Group denies all rumors that is in conversations to acquire Cboe Global Markets. The company has not had any discussions with Cboe whatsoever. While the company does not typically comment on rumor or speculation, today's inaccurate information required correction."
The FT had earlier reported that the CME is in talks to acquire Cboe in, "an all-share deal...for nearly $16 billion". The FT report claimed that, "CME, the world’s largest futures exchange operator, has offered 0.75 of its own shares for every Cboe share, according to three people familiar with the matter." The FT does not name the three people, and in what appears to be an updated version of the exclusive report, the report actually includes the text of the CME's denial.
The combination of the 2 Chicago derivative exchange giants would most likely face significant challenges with regards to US antitrust law. The past decade has seen continued consolidation in global exchanges mostly driven by these two rival Chicago-based firms.
In 2007, the Chicago Mercantile Exchange merged with its rival the Chicago Board of Trade, resulting in the formation of CME Group Inc, with electronic trading at the Chicago Board of Trade shifted to CME Globex in 2008. In 2008, the New York Mercantile Exchange (NYMEX) accepted a take over offer from CME Group. In 2012, CME Group acquired the Kansas City Board of Trade, and in 2018 CME Group completed the acquisition of London-based broker dealer NEX Group (formerly known as ICAP until 2016), founded by Michael Spencer in 1986. NEX Group was the parent company of major institutional interbank FX dealing platform EBS, and post-trade processing firm Traiana, which ICAP had acquired in 2007. View monthly ADV for EBS here.
Cboe Global Markets owns the Chicago Board Options Exchange and stock exchange operator BATS Global Markets, which it took over in 2017, making Cboe one of the largest U.S. equities market operators. In 2015, BATS had acquired Hotpsot, which was the first ECN for the institutional FX market. Hotspot is now known as Cboe FX View monthly ADV for Cboe FX here.
BATS Global Markets bought Chi-X Europe in 2011. That deal was referred by the Office of Fair Trading to the Competition Commission in June 2011 for further investigation to "determine whether a substantial lessening of competition is probable as a result of the anticipated merger." However, the Competition Commission approved the transaction in late November 2011, leading to BATS closing the deal on 30 November 2011. Cboe now claims around 20% of European equity market volume, about 5% behind leading European independent exchange operator Euronext, the owner of Euronext FX. Euronext FX monthly Average Daily Volumes can also be viewed here.
In July this year, Cboe Global Markets completed the acquisition of Chi-X Asia Pacific, which operates stock exchanges in Australia and a Proprietary Trading System and 4 other equity trading venues in Japan.
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