NYSE parent takes over Chicago Stock Exchange

The parent company of the New York Stock Exchange (NYSE) has agreed to acquire the Chicago Stock Exchange.

Terms of the deal remain undisclosed.

“After an in-depth review of strategic alternatives for CHX, we believe this transaction is clearly in the best interests of CHX stockholders and positions the organization well going forward,” said Matthew Frymier, chairman of the board of CHX Holdings, in a statement.

Last week, news broke that Intercontinental Exchange Inc. (NYSE: ICE), the leading operator of global exchanges and clearing houses, offered to buy the CHX platform for some $70 million. That’s triple the price offered by Chinese-led North America Casin Holdings.

The transaction is expected to close in the second quarter of 2018 and is subject to U.S. Securities and Exchange Commission (SEC) approval.

The financial impact will not be material to Intercontinental Exchange, or impact capital return plans, according to a statement.

CHX will continue to operate as a registered national securities exchange. It is expected to benefit from the planned deployment of the so-called NYSE Pillar trading technology, which is said to provide additional functionality for the institutional equity brokerage community in Chicago.

CHX, which handles less than 1 percent of U.S. stock trading, had been exploring a sale process.

In recent years, trading culture changed dramatically. Historically, Chicago exchanges were renowned for the dramatic outcry system — traders screaming and waving their arms about while trading. That era has given way to a more sedate-looking but equally intense computer-based trading.

Selling to the NYSE ends the independence of what is considered the last U.S. regional stock exchange.

This wouldn’t be the first M&A deal for the NYSE. Last year, it purchased the National Stock Exchange Inc (NSX). It also owns NYSE MKT and NYSE Arca Equities.

Also last year, the Chicago Board Options Exchange (CBOE) completed its $3.4 billion acquisition of rival Kansas-based Bats Global Markets.

Combined, the new CBOE emerged with an estimated $10 billion market capitalization, which puts it in striking distance of New York-based NASDAQ.

Source: Business Journal

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