CME Group will officially acquire an approximately 10% equity stake in Bolsa de Mercadorias & Futuros (BM&F), Latin America’s largest futures exchange, while BM&F will acquire around 1.19 million shares of CME Group common stock. The deal follows the signing of a letter of intent last year (see Squawkbox, October 29, 2007).
The exchanges also plan to enter into an order routing arrangement in which CME Group would connect its CME Globex electronic distribution network to BM&F, and BM&F would connect its distribution network to CME Globex for the routing of orders for electronic trading of the products of both exchanges.
Closing of the transaction remains subject to BM&F shareholder approval and
other customary closing conditions, including Brazilian regulatory approval. The BM&F shareholder meeting has been called for 26 February.
The agreement follows the initial public offering of BM&F, which became a
publicly traded company on 30 November, 2007.
CME Group and BM&F have also entered into a memorandum of understanding to explore additional commercial agreements.
These include CME Group providing offshore collateral management services and BM&F becoming a “super-clearing” member of CME Group. This would enable access to CME Group products on behalf of BM&F market participants that lack independent arrangements with CME Group clearing.