Nasdaq OMX has struck a deal to buy electronic US Treasuries trading platform eSpeed from BGC Partners for $750 million in cash.
Nasdaq OMX will also issue around 15 million common shares over 15 years, increasing the total potential value of the deal up to $1.23 billion. The transaction is expected to be accretive to earnings within the first twelve months after closing, excluding deal-related costs.
The transatlantic exchange operator contends that eSpeed gives it a strong entry point in the electronic fixed income business - one of the largest and most liquid cash markets in the world - as it looks to diversify beyond its core of stock trading, where volumes are depressed.
The new platform will be a part of the Nasdaq OMX Transaction Services business, which offers marketplaces in equities, derivatives, exchange traded products and commodities.
Bob Greifeld, CEO, Nasdaq OMX, says: "We view the eSpeed platform as a compelling extension of Nasdaq OMX's strategic direction as eSpeed is a major player in the US Treasury market, has derivative-industry margins, 70 percent of its revenue is derived from fixed contracts and it has a long-standing presence on trading desks around the world."
Meanwhile, Nasdaq OMX is working with rival CME Group on a super-fast wireless network between Chicago and New York aimed at high-frequency traders, according to the Wall Street Journal.
Separately, the company is delaying the launch of its European derivatives market, NLX, from 12 April by several weeks because UK regulator the FSA has asked LCH.Clearnet for more tests of the clearing system, says Bloomberg, citing sources.