BATS Global Markets today entered a definitive agreement to acquire Chi-X Europe, creating the largest pan-European trading centre in terms of market share and notional value traded.
Financial terms will not be disclosed for the transaction, under which Chi-X Europe and BATS Europe will combine to form BATS Chi-X Europe. The acquisition, expected to close in the second quarter of 2011, requires certain regulatory approvals.
“This transaction joins two successful and innovative market centers and will be a tremendous boost for competition in pan-European trading in the face of increasing consolidation among incumbent exchanges,” said Joe Ratterman, president and chief executive of BATS Global Markets. “BATS was drawn to Chi-X Europe because of our many similarities, particularly in the areas of culture, technology, market structure and innovation.
“We look forward to the integration process and thank our customers and investors for their continued support,” he added.
Chi-X Europe Chief Executive Alasdair Haynes said “I am very proud of what Chi-X Europe has achieved since its launch in 2007 and am confident that the combined entity will ensure that competition among exchanges will be strengthened. Both Chi-X Europe and BATS believe strongly in the pan-Europe model and we will continue to work tirelessly to reduce trading costs for our users.”
Mark Hemsley, chief executive of BATS Europe, echoed those comments.
“BATS Europe and Chi-X Europe have worked together closely on key market structure issues such as tick sizes, symbology, market data and clearing, aiming to reduce longstanding barriers in Europe’s trading environment. We are enthusiastic about the possibilities that lie ahead for the combined operation,” he said.
In the fourth quarter, Chi-X Europe accounted for €368 billion traded as it became the second largest European equity exchange in 2010. BATS Europe reached €140.3 billion traded in the fourth quarter, about 6.4% of pan-European securities.
BATS Global Markets and Chi-X Europe entered into exclusive negotiations on the 22nd of December.
Broadhaven Capital Partners, through Beech Hill Securities, acted as financial adviser to BATS Global Markets with legal advice furnished by Davis Polk & Wardwell LLP and Macfarlanes LLP. For Chi-X Europe, Lexicon Partners acted as financial adviser with Slaughter and May as well as Alston & Bird serving as legal advisers.
More information about the BATS Europe/Chi-X Europe integration will be available shortly at www.batschi-xeurope.com and www.chi-xeurope.com.
