Nasdaq to acquire International Securities Exchange

The deal is expected to be accretive to Nasdaq’s earnings within 12 months of closing. And as part of the transaction, Nasdaq is also doubling its stake in The Options Clearing Corporation (OCC) to 40%.

The transaction excludes DB’s ownership interest in BATS Global Markets, Inc. and in blockchain firm Digital Asset Holdings LLC, which will continue to be owned by DB.

The deal comes in the midst of ongoing merger talks between the DB and the London Stock Exchange plc (LSE).

See: London Stock Exchange, Deutsche Boerse confirm merger talks

The deal will be financed through a mix of debt and cash on hand. It is expected to close in the second half of 2016, subject to regulatory and otter approvals. Nasdaq says it expects to realize at least US$40 million in expense synergies within 18 months of the deal closing.

“The equities options business has been core to our long-term strategy, and we believe an essential component to the strength of the Nasdaq franchise,” says Bob Greifeld, CEO of Nasdaq. “I believe this transaction advances our ambitions with all our stakeholders, including clients and shareholders.”

“We are pursuing the goal to become the number one or two player in every business in which we operate. This goal requires an active management of our business portfolio. In areas where we are not able to meet this goal, we are evaluating other options,” adds Carsten Kengeter, CEO of DB. “ISE, purchased in 2007 before the financial crisis, is a highly attractive asset that has excellent prospects to develop under the ownership of an US exchange.”