CME Group Inc. (NYSE: CME)(NASDAQ: CME) and NYMEX Holdings, Inc. (NYSE: NMX) today announced that they have received clearance from the U.S. Department of Justice (DOJ) to complete their proposed transaction without conditions.
"Throughout the review process we were confident that the Department of Justice would approve our combination, and today’s announcement represents important progress in completing this transaction and delivering value to shareholders, customers and members," said CME Group executive chairman Terry Duffy. "We believe that our combination with NYMEX will generate $60 million in cost synergies for shareholders as well as generate compelling growth opportunities. We look forward to working together to integrate our exchanges and create long-term value for our shareholders."
"We continue to believe that CME Group is the best strategic partner for NYMEX," said NYMEX chairman Richard Schaeffer. "With regulatory clearance behind us, this combination promises substantial advantages for all market participants — the best option for us and the next phase in the evolution of NYMEX."
"We are very pleased to receive DOJ’s consent today following their rigorous review process, and we now look forward to achieving the other milestones that are necessary to successfully complete the NYMEX acquisition," said CME chief executive officer Craig Donohue. "In addition to facilitating the combination of our two companies, DOJ’s unconditional consent, together with Congress’ recent reauthorization of the Commodity Futures Trading Commission for an additional five-year period, in our view provides even further validation of the effectiveness and competitiveness of the exchange- owned clearing model. With these regulatory issues now behind us, our merger will allow us to aggressively execute on our growth strategy, which includes the provision of clearing services to customers in the over-the-counter interest rate, foreign exchange, commodity, energy and credit markets."
"Today’s announcement makes us even more confident in the opportunity that a CME/NYMEX combination promises," added James E. Newsome, NYMEX president and chief executive officer. "NYMEX and CME members and customers have already grown to expect price transparency and liquidity from both exchanges while utilizing the CME Globex electronic trading platform and our trading floors. Our combination will better position both CME and NYMEX to offer those benefits to current and prospective customers as we compete globally with other cash, over-the-counter (OTC) and regulated markets."
The transaction is subject to approvals of regulators, shareholders of both companies and NYMEX members, as well as the satisfaction of customary closing conditions. The closing of the transaction will be conditioned on, among other things, the regulatory, shareholder and membership approvals described above, at least 75 percent of the Class A memberships in NYMEX being repurchased by NYMEX and approval of amendments to the NYMEX certificate of incorporation and bylaws by the NYMEX members. Subject to necessary consents and approvals, the companies expect to close the merger in the fourth quarter of 2008.
