Nasdaq to buy International Securities Exchange from Deutsche Boerse for $1.1 bn
10 March 2016
Nasdaq Inc yesterday struck a deal to buy US options exchange operator International Securities Exchange (ISE) from Deutsche Boerse AG for $1.1 billion.
The deal would also give Nasdaq an additional 20 per cent stake in the Options Clearing Corporation, taking its total stake to 40 per cent ownership.
The transaction does not include ISE's stake in the second-largest US stock exchange operator BATS Global Markets, or blockchain startup Digital Asset Holdings, which will continue to be owned by Deutsche Boerse, the Frankfurt-based company said in a statement.
Nasdaq plans to fund the proposed acquisition with a combination of debt and cash at hand, and expects the deal to close in the second half of 2016.
Nasdaq said that it expected the deal to "realize a minimum of $40 million in annualized expense synergies."
Post closing, Nasdaq will operate PrecISE Trade, an front-end order and execution management system for trading options and stock-option combinations, as well as ISE ETF Ventures, which offers a broad range of capabilities in index development, index licensing, financing, and marketing of exchange-traded products.
ISE operates three electronic options exchanges, ISE, ISE Gemini, and ISE Mercury.
Nasdaq said that the acquisition will allow it to improve efficiencies for clients, broaden its technology offering, and provide the size and scale within the equity options industry to innovate and experiment in the market.
The acquisition will also strengthen Nasdaq as a premier options exchange operator in North America.
"The equities options business has been core to our long-term strategy, and we believe an essential component to the strength of the Nasdaq franchise," said Bob Greifeld, CEO of Nasdaq.
The deal would arm Deutsche Boerse with funds and help in its plan of buying the London Stock Exchange Group Plc (LSE).
But it may face competition in buying the LSE after Intercontinental Exchange last week said that it is mulling to table a counterbid. (See: ICE mulls bidding for London Stock Exchange Group)