The Chicago Mercantile Exchange (CME), the world’s largest and diverse derivatives exchange is planning to further cement its position by taking over Nymex.
If the deal happens, CME will become a monopolistic exchange that controls over 98 percent of the US listed futures. It would offer a wide range of contracts on both commodities and fainancials—interest rates, oil, foreign exchange, metals, agricultural products among others.
t may be recalled that in 2007, CME had merged with Chicago Board of Trade (CBOT), the oldest futres exchange in the world.
The deal is entering share holder opposition and approval of three-quarters is required for the acquisition to take place.
While many members at the New York energy exchange feel the Chicago group’s offer to buy them out for $612,000 per seat is too low, the target company’s shareholders are unhappy about the level of the overall cash-and-shares bid, which has dropped from $11.3bn or more than $119 per share when it was first proposed in January to $8.8bn or about $93 per share due to falls in the CME’s share price, The Financial Times reported.
Meanwhile, despite the bid made by Nymex no competing bid has emerged as expected by the exchanges.
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