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February 02, 2021 - Tradeweb Markets Inc., a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced that it has entered into a definitive agreement to acquire Nasdaq’s U.S. fixed income electronic trading platform. The Nasdaq platform (formerly known as eSpeed) is a fully executable central limit order book (CLOB) for electronic trading in on-the-run (OTR) U.S. Treasuries. Nasdaq’s CLOB will become part of Dealerweb, serving the firm’s wholesale sector.
The $190 million, all-cash transaction is expected to close later in 2021 subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals. Upon closing the transaction will be accretive to Tradeweb’s adjusted earnings.
Upon completion of this transaction, Dealerweb clients will have even more flexibility in how they trade OTR U.S. Treasuries, utilizing either the new CLOB or Tradeweb’s innovative direct streams protocol. Both protocols are expected to be operated on the same architecture, leveraging the same API to provide a more flexible and efficient approach than currently exists in wholesale markets.
Tradeweb CEO Lee Olesky commented, “This is a great opportunity for us to add value to the wholesale U.S. Treasuries market — one of the world’s largest and most liquid cash markets — by providing greater choice among protocols, more connected participants and lower cost. Tradeweb has been facilitating electronic trading in U.S. Treasuries for more than 20 years, and this targeted investment allows us to introduce more innovation for wholesale markets in a way that enhances our existing platform and expands our client base.”
The addition of Nasdaq’s CLOB will significantly expand the number of market participants connected to Dealerweb’s OTR treasuries platform, which includes primary dealers, principal trading firms, broker dealers and hedge funds.
Tradeweb President Billy Hult commented, “Tradeweb is constantly focused on innovation because we want our clients to have choices when it comes to how they trade electronically. The Nasdaq CLOB has been valuable to market participants as a standalone protocol, and now offering it alongside our direct streams protocol we will provide more ways for users to adapt to various market conditions. We don’t believe in one-size-fits-all trading protocols and neither do our clients.”
Following the closing, Tradeweb will facilitate trading in U.S. Treasuries through direct streams, CLOB, request-for-quote (RFQ), sessions-based trading, automated trading, list trading and click-to-trade to clients in the institutional, wholesale and retail sectors. In 2020, Tradeweb facilitated trading for an average of more than $90 billion notional per day in U.S. Treasuries across these sectors.
Centerview Partners LLC acted as financial advisor to Tradeweb and Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor.
