The Chicago Options Board Exchange (CBOE) is to acquire Bats Global Markets for over $3 billion.
The acquistion will provide CBOE, which in the past has stayed away from takeovers, a gateway into the European equity and exchange traded fund (ETF) market.
“We believe that bringing together CBOE Holdings’ product innovation, indexing expertise, and options and volatility market position, with Bats’ proven proprietary technology infrastructure, global ETP listing and trading venues, global foreign exchange marketplace and market data services,” says Edward Tilly, CEO, CBOE Holdings.
“Bats’ market data expertise will allow CBOE Holdings to develop new products using the company’s index calculation capabilities.”
After news of a possible takeover of Bats broke out last week, shares in the exchange operator surged 20% to $31.74, the biggest rally since its initial public offering (IPO) in April this year. According to its release, CBOE will purchase Bats at $32.50 per share.
“This transaction offers our stockholders immediate cash value and allows us the opportunity to continue our great growth trajectory by combining with another market innovator in CBOE,” said Chris Concannon, Bats’ CEO.
Following the transaction, CBOE expects to incorporate Bats proprietary trading platform, as well as launching a new set of market data services.
The takeover of Bats, which also operates a US options exchange, dwarfs the acquisition of the International Securities Exchange (ISE) by Nasdaq earlier this year for $1.1 billion.