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CME and Cbot complete merger

13 July 2007  |  1714 views  |  0 Source: Chicago Mercantile Exchange

Chicago Mercantile Exchange Holdings Inc. (NYSE/Nasdaq: CME) and CBOT Holdings, Inc. (NYSE: BOT) today announced that they have completed the merger of their companies, effective today.

The combined company, CME Group Inc., a CME/Chicago Board of Trade Company, will be the world's largest and most diverse exchange, with all major benchmark asset classes ultimately available on a single trading platform and floor. CME Group stock will trade on the New York Stock Exchange and NASDAQ under the ticker symbol "CME."

As of the close of the markets today, CBOT Holdings stock has been delisted and will no longer trade on NYSE.

The merger creates a company with pro forma 2006 annual revenue of $1.6 billion and average trading volume of approximately 10.2 million contracts per day in the second quarter 2007. Customers from more than 80 countries trade CME Group products, primarily electronically. Corporate headquarters of the combined organization will remain in Chicago at 20 S. Wacker Drive.

"This is a historic day for both companies, as our two Chicago institutions join to create CME Group," said CME Group Executive Chairman Terry Duffy. "We are grateful for the strong support demonstrated by CME and CBOT shareholders and are confident today's close of our landmark merger will bring substantial benefits to all our shareholders, customers, members and the city of Chicago."

"As we have said all along, we believe this is the right strategic decision for CBOT's shareholders and customers," said Charles P. Carey, CME Group Vice Chairman and former Chairman of CBOT. "This merger delivers significant value for our shareholders and creates tremendous opportunities for our members and customers. We are excited to now move forward as one company with our combined resources and strengths."

"We are extremely pleased to complete our merger and begin operating as the largest and most diverse exchange in the world," said Craig Donohue, CME Group Chief Executive Officer. "We are now in the enviable position of executing our integration plans while simultaneously pursuing a broad range of ambitious new growth opportunities. We are fortunate to enjoy a leading position in the further growth and consolidation of our industry."

Under the terms of the agreement, CBOT stockholders will receive 0.375 shares of CME Group Class A common stock per share of CBOT Class A common stock. In addition, immediately prior to the close of the merger, CBOT paid the previously announced one-time cash dividend of $9.14 per CBOT share, or a total of $485 million.

CME Group Inc. intends to promptly initiate a previously announced cash tender offer for up to $3.5 billion in common stock of the combined company, or approximately 12 percent of the combined company's outstanding shares, at a fixed price of $560 per share. The tender offer will be open to former CBOT Holdings shareholders that received CME stock in connection with the merger, as well as existing CME shareholders.

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