CME Group Inc. (NASDAQ: CME) today announced that it has completed its acquisition of NYMEX Holdings, Inc. (NYSE: NMX). The combined companies will provide customers around the world with access to all major benchmark asset classes, including interest rates, equity indexes, foreign exchange, energy, agricultural commodities and metals. CME Group Class A common stock will continue to trade on the NASDAQ under the ticker symbol "CME." NYMEX Holdings, Inc. common stock is being delisted and will no longer trade on the NYSE.
The merger creates a company with pro forma 2007 annual revenue of $2.7 billion and average trading volume of approximately 14.2 million contracts per day in the first two quarters of 2008. Customers from more than 85 countries trade CME Group products, primarily electronically. Corporate headquarters of the combined company will remain in Chicago at 20 S. Wacker Drive. CME Group’s New York office will be located at the NYMEX World Headquarters, One North End Avenue.
"We are extremely pleased to complete our transaction and welcome NYMEX and COMEX into CME Group," said CME Group executive chairman Terry Duffy. "This is another milestone for CME Group and NYMEX in our long and successful histories. Together, we will continue operating the largest and most diverse derivatives exchange in the world. We are extremely grateful for the support of NYMEX shareholders, members and employees. As a united company, we are well positioned for a new phase of growth, innovation and product development that will benefit our customers, shareholders and market users around the world."
"We are very proud to have now completed the consolidation of three of the world’s most important and successful derivatives exchanges," said CME Group chief executive officer Craig Donohue. "Our NYMEX and COMEX acquisition further strengthens CME Group’s leading position in global financial markets and provides significant and valuable new growth opportunities for our shareholders, customers and members. CME Group has a strong track record of delivering cost synergies and realizing revenue and growth opportunities from consolidation transactions and we now look forward to the integration of our two great companies."
Under the terms of the agreement, NYMEX Holdings, Inc. stockholders as of the closing will receive, at their election, consideration in cash, stock or a combination of cash and stock, subject to proration as described below. The cash consideration per share of NYMEX Holdings common stock is $81.16. The stock consideration will be equal to 0.2378 shares of CME Group Class A common stock for each share of NYMEX Holdings common stock. Cash will be paid in lieu of fractional shares. Preliminary election results indicate that the following elections were made with respect to NYMEX Holdings common stock (i) approximately 58 million shares for stock elections, (ii) approximately 29 million shares for cash elections and (iii) no elections with respect to approximately 8 million shares. Non-elections are deemed to be an election for cash. Approximately 9 million shares of NYMEX Holdings common stock included in the above elections were delivered pursuant to guaranteed delivery. Based upon these preliminary numbers, the stock consideration was oversubscribed and former NYMEX Holdings stockholders who elected to receive stock will receive a portion of their consideration in cash, rather than the entire amount of the stock that they elected to receive.
The companies also announced they will begin integrating NYMEX business operations in order to achieve approximately $60 million in expected cost synergies. The timetable for integration includes:
— Completing the staffing process 60 days post-closing;
— Integrating membership systems in first-quarter 2009;
— Integrating fee systems in second-quarter 2009;
— Migrating the NYMEX and COMEX trading floors into one in second-quarter 2009;
— Combining clearing systems in third-quarter 2009; and,
— Integrating price reporting systems in third-quarter 2009.
CME Group and NYMEX entered into a strategic partnership in May 2006 to offer all NYMEX energy and metals contracts to trade electronically on the CME Globex® electronic trading platform. Today, more than one million NYMEX contracts trade every day electronically. Overall, the combined open outcry and electronic trading average daily volume, including over-the-counter trades on ClearPort, in July for NYMEX was 1.9 million contracts, a 30 percent increase from 1.4 million contracts per day in July 2007.
