Monday 10 December 2018

NYSE in talks to buy Chicago Stock Exchange

 

People walk on Wall Street in front of the New York Stock Exchange (NYSE) in New York, U.S., February 6, 2018. REUTERS/Brendan McDermid
People walk on Wall Street in front of the New York Stock Exchange (NYSE) in New York, U.S., February 6, 2018. REUTERS/Brendan McDermid

Brian Louis

The New York Stock Exchange is in talks to buy the Chicago Stock Exchange, the Wall Street Journal said, after US regulators rejected a bid by a Chinese-linked consortium to take over the 136-year-old bourse.

NYSE has discussed paying about $70m (€57m) for the business, though the talks could still fall apart, the newspaper said, citing people familiar with the matter it didn't identify. The Chicago exchange handles less than 1pc of daily US stock trading.

Representatives for both exchanges declined to comment on the story.

The Chicago exchange, founded in 1882, had ambitions of establishing itself as a marketplace for small companies, especially those based in China. But the Securities and Exchange Commission last month ruled that the bid by the Chinese investors didn't comply with US rules governing stock exchanges. The SEC said it couldn't resolve concerns about the proposed ownership structure, which would have given 29pc of the company to a China-based shareholder.

Though the transaction was relatively small, it drew outside attention because of the country of origin of the lead investor, Chongqing Casin Enterprise Group Co.

SEC chairman Jay Clayton, who joined the agency this year following a career as a deals lawyer, has publicly fretted that it's too hard for companies to go public in the US. The exchange had hoped to address that situation by selling itself, while also creating a conduit to China.

Opponents of the takeover, including a number of US politicians, said letting a Chinese firm invest in a US exchange was a bad idea. On the campaign trail, Donald Trump blasted the transaction after it was announced in early 2016.

Bloomberg

Bloomberg

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