[ M A R K E T
R E V I E W
|
M E R G E R S
&
I
t has been a remarkable year for mergers
and acquisitions (M&A) in the financial
services space, complete with drama,
surprises and long-expected deals having been
floated, agreed and finalised.
This follows hot on the heels of 2017, when
the headline-grabbing proposed mega-merg-
er” merger of equals” between London Stock
Exchange Group (LSEG) and Deutsche Borse
was spiked by the European Commission
over concerns of a potential, and very prob-
able, monopoly over the European markets,
while there were significant buy-side tie-ups
between Standard Life and Aberdeen Asset
Management, and Janus Capital and Hender-
son Group.
So, with a cast of players including NEX and
CME Group, State Street and Charles River,
IHS Markit and Ipreo, The TRADE’s very first
(and very unofficial) M&A awards runs the
rule over the most noteworthy of this year’s
M&A activity so far.
Biggest game-changer:
CME & NEX Group
The most significant of deals so far in 2018 is
the £3.9 billion marriage between US futures
exchange operator CME Group and the UK’s
FinTech and electronic trading powerhouse
NEX Group - formerly ICAP. While analysts
may have rated CME Group’s £3.9 billion offer
for NEX Group as exceeding market predi-
cations, it was nonetheless enough to deter
rival exchange groups, such as LSEG, from
swooping in with a higher bid. NEX Group’s
The CME & NEX merger
could prove to be an absolute
game-changer for the indus-
try on more than one front.
52 // TheTrade // Autumn 2018
A C Q U I S I T I O N S ]
shareholders have already voted in favour of
the acquisition and the deal is, at the time of
writing, on track to be completed later this
year.
This merger could prove to be an absolute
game-changer for the industry on more than
one front, as both firms streamline trading
operations and combine platforms, bringing
cash and futures products together with over-
the-counter (OTC) products. Should CME
Group combine its clearing services with NEX
Group’s OTC derivatives post-trade services
provider TriOptima, more than a few feathers
will be ruffled in the European OTC clearing
market, with the likes of the London Stock
Exchange’s LCH business the prime target to
be knocked off its perch.
It’s also a firm commitment from CME to
build out its operations in Europe following
the closures of CME Europe and CME Clear-
ing Europe last year, particularly in London
where NEX Group is based. The exchange
giant already has a sizeable presence in the
UK capital which will more than likely be
bolstered going forward through the addi-
tion of NEX, going against the overwhelming
trend of financial firms looking for the exit in
the face of impending Brexit chaos. Outgo-
ing NEX chief executive, Michael Spencer,
has been characteristically outspoken on the
subject, talking up London’s prospects for the
future and an advisory role within CME’s new
acquisition means his influence will still be
firmly felt internally.
Most dramatic deal:
ION Investment
Group & Fidessa
When it comes to sheer drawn-out drama, the
award for the most dramatic acquisition of the
year so far, there’s only one winner: Fidessa.
After news of Temenos’ initially successful
bid for the well-established industry vendor
hit headlines in February, a sudden frenzy of
counterbids from various other companies
was triggered and an ongoing saga involving
numerous participants, as well as involvement
from the UK Takeover panel to chivvy the