European Commission Approves Joint Venture of IHS Market, CME Group

The European Commission has granted unconditional European Union antitrust approval to the proposals of IHS Markit (NYSE: INFO) and CME Group (NASDAQ: CME) to form a joint venture combining their post-trade services.

In its public confirmation on Thursday, the European regulator specified that it does not have any competition concerns with the formation of the joint venture.

“The proposed transaction is largely complementary, and results in a few technically overlapping areas between the companies' activities relating to trade processing products,” the EU antitrust regulator stated.

No Competition Concerns

Both IHS Markit and the CME Group first announced their intention to form a joint venture overlapping parts of their businesses earlier in January. The joint venture will consist of IHS Markit's over-the-counter (OTC) derivatives and foreign currency trade processing business (MarkitSERV) and of CME Group's OTC derivatives optimization businesses, which it operates as Traiana, TriOptima and Reset.

As specified by the two earlier, the joint venture will provide trade processing and trade/portfolio optimization services in several asset classes.

The financial services giants agreed that IHS Markit will make a payment of $113 million to CME Group at the closure of the deal to gain equal ownership and shared control of the joint venture. However, the companies did not disclose further financial terms.

“The Commission's investigation also showed that any strategy to foreclose competitors following the transaction would be unlikely. Therefore, the Commission concluded that the proposed transaction would raise no competition concerns,” the European Commission added.

Meanwhile, IHS Markit is in the process of being acquired by business information provider S&P Global in a $44 billion deal, which will need regulatory clearance. In addition, IHS bought regulatory reporting firm Cappitech earlier this year but did not disclose the terms of that deal.