The CME Group has issued an announcement detailing its bid for the acquisition of Trayport and FENICS from the GFI Group. The strategic transactions in order to make the deal possible include the full acquisition by the CME Group of the GFI Group for $4.55 per share, all paid out in CME Group stock. The price paid for the takeover is at a 46% premium above yesterday’s closing price.
According to the announcement, after the conclusion of the transaction, a private consortium led by GFI Group’s management will acquire from the CME Group the wholesale brokerage of GFI for $165 million in a cash deal, assuming about $63 million of unvested deferred compensation and other liabilities. The brokerage business will continue using FENICS and Trayport by entering into long-term commitment agreements.
The acquisition is expected to close in early 2015, and is subject to the approval of the stockholders of the GFI Group.
CME Group’s Executive Chairman, Terry Duffy, stated: “By acquiring Trayport, a well-established business that already has a strong client base, we will both expand CME Group’s involvement with European energy markets and increase operational efficiencies and trading opportunities for all European energy market participants – all while maintaining the independence of the Trayport operating platform. This acquisition is another strong example of how CME Group is expanding its international footprint and committed to the European marketplace overall.”
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The CME Group’s CEO, Phupinder Gil, added: “The addition of FENICS will allow our FX futures and options business to more effectively and efficiently integrate and connect with the global OTC FX options marketplace.”
Trayport and FENICS Subsidiaries
Current management at Trayport will continue to operate the subsidiary. The acquisition is adding to the European energy business of the CME Group, where the technology is used by brokers, exchanges and trading counterparties. Several markets like, oil, natural gas, coal, power and carbon emissions among other have been benefiting from the solutions offered by the company.
The acquisition of FENICS, which is keeping its current management structure, provides price discovery, analytics, risk management and workflow connectivity services for the global OTC FX options market. The takeover deal continues CME Group’s investment in European infrastructure after the company launched its FX futures and options on CME Europe earlier this year.