The companies said in January that they were holding talks regarding a merger. The terms of the definitive agreement disclosed today are the same as those previously disclosed whereby Nymex shareholders will receive $36 in cash and 0.1323 of a share of CME stock, in exchange for each Nymex share they hold.

In a statement, CME says it paying 12.5 million shares - valued at $6.08 billion based on the stock's closing prices of $486.05 on Friday- along with $3.4 billion in cash.

Following the transaction, Nymex shareholders will hold approximately 18.6% of the combined company on a pro forma basis.

Under the deal Nymex is also required to buy its 816 class A memberships outstanding for about $612,000 each, or $500 million. A condition of closing is that at least 75% of the memberships must approve the transaction.

In a statement, CME Group says the acquisition will enable it to diversify revenues, with products in every major asset class, and is expected to generate pre-tax cost savings of approximately $60 million annually, driven primarily by technology and administrative cost reductions.

The combined company will continue to operate a trading floor in New York City "as long as both revenue and profitability thresholds are achieved going forward", says CME.

Terry Duffy, CME Group executive chairman, says the agreement "builds on" the trading technology agreement signed by the two exchanges in April 2006 which saw Nymex migrate some products to the Globex platform.

"Since coming onto the CME Globex platform, average daily volume of Nymex products on CME Globex has increased to nearly one million contracts," says Duffy. "Through this combination, we will be better able to generate synergies between our exchanges to provide increased efficiencies and new trading opportunities for customers around the world and create new long-term value for our shareholders."

Upon completion of the transaction, Duffy will remain executive chairman of CME Group and Craig Donohue will remain CEO. The board of directors of CME Group will add three directors from Nymex.

The deal is expected to close in the fourth quarter of 2008.