27 November 2015

Bats agrees Chi-X Europe acquisition

21 February 2011  |  9924 views  |  1 BATS Trading web screen shot

The rush by exchange operators to consolidate continues apace, with Bats Global Markets inking a definitive agreement to buy Chi-X Europe.

Financial terms of the deal - set to close in the second quarter subject to regulatory approval - were not disclosed, but Bloomberg, citing sources, says Kansas City-based Bats will pay $300 million plus $65 million in potential future payouts for its rival.

Chi-X Europe was launched in 2007 by Japan's Nomura through inter-agency broker Instinet, to take on traditional exchanges such as the LSE and Deutsche Börse in the wake of MiFID. Instinet now has a 34% stake, with a group of 12 banks and trading firms - including Citi, Goldman Sachs, UBS and Citadel - holding the rest of the shares.

Since launch, the MTF has used faster trading technology and lower fees to attract market share from incumbents - it now attracts around a quarter of trading in FTSE 100 shares - and moved into profit last year.

In August the platform confirmed that it had received a bid enquiry, which was widely believed to have come from Bats and has now finally hammered out a deal.

Bats is an upstart itself, launching a US ECN in 2006 although it has since obtained exchange status. In 2008 it entered Europe, becoming a direct Chi-X competitor but has a far smaller market share.

Combined, the pair, to be called Bats Chi-X Europe, claim they will be the largest pan-European trading centre in terms of market share and notional value traded. Thomson Reuters data shows the firm will have 23% of the European trading market, compared to a merged Deutsche Boerse and Nyse Euronext on 29.7%.

Joe Ratterman, president and CEO, Bats, says: "This transaction joins two successful and innovative market centres and will be a tremendous boost for competition in pan-European trading in the face of increasing consolidation among incumbent exchanges. Bats was drawn to Chi-X Europe because of our many similarities, particularly in the areas of culture, technology, market structure and innovation."

The agreement follows deals in the past couple of weeks between Deutsche Boerse and Nyse Euronext and the LSE and Canada's TMX Group while speculation continues about a possible tie-up between Nasdaq OMX and IntercontinentalExchange.

Comments: (1)

A Finextra member | 21 February, 2011, 12:40

This deal looks very expensive!

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

18 February, 2011
15 February, 2011
09 February, 2011
09 February, 2011
10 January, 2011
13 December, 2010
24 August, 2010
31 October, 2008
16 October, 2008
19 August, 2008
10 January, 2008
16 April, 2007
20 September, 2006

Related company news


Top topics

Most viewed Most shared
Coinbase issues Bitcoin debit card
8325 views comments | 18 tweets | 21 linkedin
BBVA buys 29.5% stake in Atom for £45...
7650 views comments | 34 tweets | 41 linkedin
BNP Paribas to test contactless payment di...
5968 views comments | 17 tweets | 25 linkedin
UK banks propose merger of five trade asso...
5338 views comments | 7 tweets | 9 linkedin
Hilton confirms data breach
5238 views comments | 11 tweets | 17 linkedin

Featured job

£100,000 basic, £180,000 OTE + Benefits

Find your next job