BM&FBovespa agrees deal to buy Brazilian clearing house Cetip

Source: BM&FBovespa

BM&FBOVESPA and Cetip presented the press today with a proposal to merge the operations of the two companies, creating a world-class financial infrastructure company of great systemic importance, ready to compete in a global market that is ever more sophisticated and challenging, while increasing the security, solidity and efficiency of the Brazilian market.

The agreement, to be submitted to shareholders’ meetings at both companies, still requires approval by the regulatory bodies the Central Bank of Brazil, the Securities and Exchange Commission of Brazil and Brazil’s Council for Economic Defense.

Integrating activities will significantly strengthen the resultant company’s business model, as it will increase revenue diversification; grant financial institutions, custodians, bookkeepers, asset managers and brokerage houses consolidation of their back office and treasury systems and processes, significantly reducing operating costs and risks for the entire financial system; and as it will provide efficiency gains in interactions with financial and capital market surveillance bodies.

Bearing in mind the complementary nature of the two companies, combining their forces will entail gains for customers, market participants, investors and companies that require resources to invest or financial instruments to manage their risk. In addition to cost efficiencies, one of the main gains from the new deal will be greater capital efficiency through customers being able to use OTC or exchange-traded derivatives with the same central counterparty.

“The operation demonstrates the commitment that both parties have with Brazil, with our customers, with innovation and with the development of markets. The challenging period in which our country finds itself has not prevented us from joining forces and making this historic combination into reality”, said chairman of the BM&FBOVESPA Board of Directors, Pedro Parente.

“I wish to make particular note of the visionary identity of the two companies, despite the both of them having built successful paths separately. This is why the combining of forces is an attractive opportunity for all of us to become part of the community surrounding both firms,” said chairman of the Board of Directors of Cetip, Edgar da Silva Ramos.

“Together, BM&FBOVESPA and Cetip have become a much larger company than the sum of their parts, with substantial benefits for the users of the services of both. The integration of activities significantly reinforces the business model of the new company, making it more comprehensive for facing a dynamic and internationally more competitive market environment,” said BM&FBOVESPA CEO, Edemir Pinto.

“This combination will generate synergy opportunities and increase the scope of activity of both firms, which complement each other not only in products and services, but also in their forms of activity and their excellence, creating one company that has global proportions and is a global reference”, said Cetip CEO, Gilson Finkelsztain. 

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