CME Group Inc. (Nasdaq: CME) has just announced that it has completed its acquisition of NEX Group plc (LON:NXG). The combined company will enable clients worldwide to trade futures, cash and over-the-counter (OTC) markets, optimize portfolios and analyze data to efficiently manage risk and capture opportunities.
CME Group will retire the NEX name and brand but will continue to operate its individual Markets and Optimisation businesses as sub-brands including BrokerTec, EBS, Traiana and TriOptima. Corporate headquarters will remain in Chicago, with London continuing to serve as CME Group’s European headquarters.
CME Group will use its technology, futures trading and product development expertise to strengthen and scale NEX businesses, while preserving their existing market structures. The combined company’s leading electronic FX and fixed income platforms will deliver new trading opportunities and simplify access by reducing the number of touchpoints to trade across platforms. In addition, the combined company’s post-trade services expertise will strengthen its compression, reconciliation and processing businesses.
We are extremely pleased to complete this acquisition and welcome NEX into CME Group,” said CME Group Chairman and Chief Executive Officer Terry Duffy. “By combining the strengths of our two leading organizations, CME Group is uniquely positioned to address the changing needs of market participants worldwide. Together, we will provide efficient access to futures, cash and OTC markets, as well as post-trade services and data offerings that will further support cost-effective trading and risk management.
Michael Spencer and his team have built NEX into a world-class company. Our combined organization will preserve the existing market structure of our various businesses while also creating efficiencies and streamlining technology for our clients. With a significantly expanded global footprint, we are committed to ensuring a smooth transition for all customers and partners going forward.
Today NEX becomes part of the world’s leading exchange group,” commented Michael Spencer. “Together we will continue to innovate and deliver industry-leading technology to our customers and help to drive the continued development of the financial markets. I am excited about the future for this combined group and the many new opportunities that it will provide for our employees, customers and the wider marketplace. I look forward to working with Terry, the CME Group Board of Directors and the combined team from both CME and NEX as we shape and grow the company.
As previously announced, today Spencer has joined the CME Group Board of Directors and will remain with the combined company as a Special Adviser, working with key clients, regulators and officials in EMEA and Asia.
The acquisition is expected to be immediately accretive to adjusted cash earnings per share and creates a company with pro forma 2017 annual revenue of $4.3 billion. CME Group will begin integrating NEX business operations and anticipates run-rate cost synergies of $200 million annually by the end of 2021.