$8.3 billion NYMEX acquisition strengthens world's No1 derivatives market CME

NYMEX Holdings shareholders yesterday voted to approve the CME Group's $8.3-billion takeover offer. The transaction cements the CME Group's status as the world's largest derivatives market. About 650 of 816 NYMEX members, or 80 per cent of the electorate, voted to approve the deal, NYMEX's chairman Richard Schaeffer said in a conference call.

The CME Group's chief executive, Craig Donohue, and its chairman, Terry Duffy, met with shareholders in the last two weeks to shore up support after some NYMEX members said they would reject the offer. The CME Group raised the offer twice, and last week two chief opponents - Robert Sahn and Gary Glass - dropped their complaints.

Since approval from a majority of shareholders and at least 75 per cent of NYMEX's 816 members was required for the buyout, a small number of dissenters could have scuttled the deal. Now, it is expected to close on Friday.

In heavy after-hours trading, CME shares rose to $339, up 0.8 per cent. NYMEX shares rose 1.7 per cent to $81.35.

The CME Group, which tops EUREX among derivatives exchanges, trades everything from futures on corn and Treasury debt to benchmark contracts for oil and natural gas. It was formed by the merger in 2007 of the Chicago Mercantile Exchange and the Chicago Board of Trade. NYMEX is also known as the New York Mercantile Exchange. (See: World's largest exchange is born as Chicago Board of Trade - Chicago Mercantile Exchange merge)

Adding NYMEX's dominant energy and metals contracts will broaden CME's product mix. The transaction is the largest this year among exchanges, which are racing to meet demand for lower-cost electronic trading. CME has promised millions of dollars in cost savings once the exchanges are integrated.