CME Group, the world’s largest and most diverse derivatives exchange, today announced that it has acquired Credit Market Analysis Limited (CMA), a leading provider of credit derivatives market data. This move will provide CME Group with greater exposure to the rapidly growing $46 trillion in notional outstanding credit derivatives market. It offers the potential to leverage CME Group’s clearing and trade execution capabilities, enhancing CMA’s products to create greater value and efficiencies for its customers.
As a wholly owned subsidiary of CME Group, CMA will remain headquartered in London and will continue to operate under the CMA name. Laurent Paulhac will continue in his role as the company’s Chief Executive Officer and the existing CMA management team is expected to remain in place.
CMA currently offers two products to over-the-counter (OTC) credit derivative market participants, primarily focused on asset managers, hedge funds and other buyside participants. The company’s innovative flagship CMA QuoteVisionTM price discovery tool provides a clear structured view of live indicative quotes. QuoteVision capitalizes on the email-based quoting model prevalent in the credit default swap market and enables traders to view, organize and store quotes that they receive in real time, regardless of format. The CMA DataVisionTM end-of-day pricing service, another key product offering, provides objective buy-side consensus price verification data, enabling organizations to have a true market view and more accurately evaluate their end-of-day positions.
"When we think of diversification at CME Group, we look beyond asset class diversity and think more strategically in terms of products and services where we believe we can deliver innovation and create new value for the market," said Terry Duffy, CME Group executive chairman. "We are pleased to add CMA’s data products to the services we provide and believe that we can help them enhance their offerings, creating a higher level of market efficiencies and transparency. We will continue to look for strategic opportunities through alliances, joint ventures and acquisitions, which can further our continued growth and our ability to deliver value to our customers and shareholders."
"Today’s announcement of our acquisition of CMA reflects our ongoing commitment to expand our existing core businesses while seeking innovative and substantial new growth opportunities in today’s rapidly evolving markets. CME Group’s OTC strategy has focused on identifying opportunities where we can leverage our strengths in technology and clearing services, which will create greater efficiencies and opportunities for market participants," said CME chief executive officer Craig Donohue. "It’s impossible to overestimate the importance of accurate, timely and reliable sources of market data to the smooth functioning of financial markets, especially in today’s environment. Working together, we believe that we can expand CMA’s existing services in the credit derivatives markets, as well as to additional asset classes that would benefit from additional transparency or central counterparty clearing services."
"CMA promotes transparency in the credit derivatives market with innovative products and services," said Laurent Paulhac, CMA’s chief executive officer. "With CME Group’s support, we can further enhance the effectiveness of OTC credit market professionals. This move will take CMA’s business to new levels, enabling us to expand our product line and explore opportunities within and beyond the credit derivatives market. Taking the longer view, we will leverage synergies between CMA’s products and CME Group’s market data and trading-related capabilities to provide greater market transparency and to better serve the industry."
Under the agreement, CME Group, through its subsidiary CME Swaps Marketplace Ltd., will purchase 100 percent of the share capital of CMA, all of its operating assets and intellectual property. Further terms of the sale were not disclosed. Lehman Brothers is acting as financial advisor to CME Group, and Skadden, Arps, Slate, Meagher & Flom, LLP is acting as CME Group’s legal advisor. Jefferies & Company is acting as financial advisor to CMA, and Gibson, Dunn and Crutcher, LLP and Duncan Cotterill are acting as CMA’s legal advisors.