Shareholders OK $11.9 Billion CBOT Deal
Shareholders for the Chicago Board of Trade approved plans for CBOT to join forces with longtime rival, the Chicago Mercantile Exchange, in an $11.9 billion merger. The deal ends CBOT’s 159 years of independence, but that creates the world’s largest exchange.
The offer by Chicago Mercantile Exchange Holdings Inc. to buy CBOT ended four months of negotiating and wheeling and dealing that involved attempts by the Atlanta-based Intercontinental Exchange Inc., to cut a deal of its own. ICE quietly conceded in the face of the last bid by Merc. Jerome Israelov, a wheat trader for 17 years, told The Associated Press that going with the s smaller ICE would have been too risky.
The two exchanges said the deal should close within days. The new firm operating the exchanges will be called CME Group, a Chicago Board of Trade company.
A deal with CME became a sure thing only after Merc raised its offer a third time Friday to win over CBOT’s largest and most influential shareholder, Australia-based Caledonia Investments. Once that happened, the deal was all but done. ICE’s most recent proposal had been valued at a still-hefty $11.7 billion.
