Bats Global Markets, Inc.— operator of the second-largest stock exchange in the U.S., as well as the largest stock exchange and trade reporting facility in Europe—has entered into a definitive agreement to be acquired by CBOE Holdings, Inc., the holding company for Chicago Board Options Exchange. The transaction—consisting of 31 percent cash and 69 percent CBOE Holdings stock—is valued at approximately $3.2 billion.
The agreement has been approved by the Board of Directors of each company by unanimous votes of the members present.
Following the close of the transaction, Edward Tilly, CBOE Holdings CEO, will remain CEO of the combined company. Chris Concannon, Bats CEO, will become President and COO, succeeding Edward Provost, CBOE Holdings President and COO, who plans to retire. Chris Isaacson, Bats CIO, will succeed Gerald O’Connell as CIO, who also plans to retire. CBOE Holdings CFO Alan Dean will remain as CFO of the combined company.
It wasn’t immediately clear what implications the deal would have for Bats’ Lenexa-based headquarters, but Tilly signalled that the innovation taking place in Kansas City was central to Bats’ value proposition. “There’s an incredible technology team in Kansas City (that) has been through integration as well, is really what we’ll be leaning on,” he said during the conference call announcing the deal. “But I think the first and foremost – the most important thing for us is looking at this from a cultural perspective. This is a great fit culturally.”
The acquisition, he said, “represents a compelling combination that should deliver significant benefits for our customers and enhanced long-term value for our stockholders.” He added, “We expect the acquisition to enhance the trading experience by streamlining access for customers and to allow CBOE Holdings to provide greater scale, while significantly increasing operational and cost efficiencies.”
That positivity was echoed by Concannon at Bats, who said, “This transaction offers our stockholders immediate cash value and allows us the opportunity to continue our great growth trajectory by combining with another market innovator in CBOE.” Concannon also said, “Today’s announcement is a testament to the hard work and achievements of our talented employees around the globe.”