Chicago Mercantile Exchange Holdings Inc. and CBOT Holdings, Inc. today announced new accelerated timelines for electronic migration to CME Globex and trading floor consolidation following the closing of their proposed merger.
Upon completion of the merger, which is expected to close by mid-year 2007 pending approvals by regulators, the shareholders of both companies and CBOT members, the companies plan to migrate electronically traded CBOT products onto the CME Globex platform in a phased migration, beginning in first quarter of 2008. Previously, this integration was planned to take place one year following close.
Additionally, CME and CBOT open outcry markets will be migrated onto a single trading floor facility located at CBOT in the second quarter of 2008. The floor consolidation was initially expected to happen 12 to 18 months following close.
“The goal of the proposed merger is to deliver significant efficiencies along with new products and technologies as quickly as possible to our global customer base,” said CME executive chairman Terry Duffy. “Both parties are committed to developing this aggressive migration timeline post close so that our customers will be able to realize the benefits of our combined company sooner — not only cost savings but also expanded opportunities by placing complementary products on a consolidated electronic trading platform and trading floor.”
“Both organizations are working very hard to ensure that CME Group will be in a position to deliver at least US$125 million in annual expense synergies as soon as possible after the close of our historic merger,” said CME chief executive officer Craig Donohue. “Our valued customers, who will also realize annual savings of approximately US$70 million, will benefit greatly from our accelerated integration timeframe.”
“Growth in the global derivatives industry continues to accelerate with competition spanning the exchange and over the counter markets,” said CBOT chairman Charlie Carey. “The combination of our leading institutions allows us to capitalize on our synergies, in both the electronic markets and on the trading floors, and we will be better positioned to compete in order to continue our traditions of innovation and leadership.”
Targeting a mid-year close, the companies have achieved significant milestones in recent weeks, including the setting of the date of the CME and CBOT shareholder meetings and CBOT member meetings to vote on the transaction on April 4, and the mailing of the final prospectus/joint proxy statements.