IHS Markit, CME Get UK Antitrust Agency’s Nod for Joint Venture

The two will combine their post-trade services.

The United Kingdom’s Competition and Markets Authority (CMA) announced on Tuesday that it has cleared the anticipated joint venture of IHS Markit (NYSE: INFO) and CME Group (NASDAQ: CME). The two companies are combining their post-trade services.

“The CMA investigated and cleared the anticipated joint venture between IHS Markit Ltd’s MarkitSERV Business and CME Global Inc.’s Optimization Business,” the UK antitrust regulator stated.

The two financial industry giants announced in January that they want to combine parts of their businesses and form a joint venture. It 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.

Not an Antitrust Concern

The CMA opened an inquiry against the proposals of the joint venture in June over several market-related concerns.

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“The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation… and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services,” the CMA wrote earlier.

The latest decision came less than a week after the European Commission approved the formation of the joint venture by the two companies. “The Commission’s investigation showed that any strategy to foreclose competitors following the transaction would be unlikely,” the ESMA stated.

Under the already agreed terms, IHS Markit needs to make a payment of $113 million to CME Group at the closure of the deal that will give both companies equal ownership and shared control of the joint venture.

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