CME Group has now received all of the regulatory approvals necessary to complete its estimated $5.5 billion takeover of Michael Spencer’s NEX Group Plc. In a joint statement on Wednesday, the company’s confirmed that they have now received approval from the UK Competition and Markets Authority (CMA) for the acquisition.
With the final approval secured, the world’s largest derivatives exchange is closer than ever to securing a new source of revenue. Already, CME Group has six approvals from regulators in the United States, Germany, Italy, and Sweden. Just this month, CME Group secured approval from the US Department of Justice.
As Finance Magnates reported, CMA launched its investigation into the acquisition in mid-September, to determine whether the deal will lessen competition in the UK. At the time, the regulator said that it would announce its decision by November 8 of this year.
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Next Steps for CME Group and NEX
As outlined in the joint statement, the next step for the firm is to have the scheme of arrangement – a procedure that allows a company to reconstruct its capital, assets or liabilities – sanctioned by the court. This is expected to take place on November 1, 2018, and will, therefore, be effective from November 2, 2018.
The suspension of trading in NEX Shares is also expected to come into effect on November 1, 2018. By 8:00 am London time on November 5, 2018, the listing on NEX Shares on the premium segment of the Official List and the Main Market of the London Stock Exchange (LSE) will be canceled. By 8:00 am New York time on the same day, CME will issue new shares.
When the acquisition was originally announced back in March, the size of the deal raised a few eyebrows, with many analysts and industry insiders considering the amount as quite significant. However, as we reported at the time, the reason for the bid and steep price when compared to NEX earnings was said to be because of the potential for a reformed treasury market.