IHS Markit to pay CME Group $113m amid EU approval of post-trade JV

Rick Steves

IHS Markik, at the same time, is being acquired by S&P Global Inc for $44 billion in stock, subject to approval as well.

The European Commission has approved the proposed joint venture for OTC markets by CME Group and IHS Markit. The deal announced in January secured unconditional EU antitrust approval.

“The proposed transaction is largely complementary, and results in a few technically overlapping areas between the companies’ activities relating to trade processing products”, said the official statement.

CME Group and IHS Markit have agreed to combine their post-trade services in JV that will include trade processing and risk mitigation operations.

By incorporating CME Group’s optimization businesses –Traiana, TriOptima, and Reset – and IHS Markit’s MarkitSERV, the new company can enhance platforms and services for global OTC markets across interest rate, FX, equity and credit asset classes.

More efficient front-to-back workflow, connectivity, and trading certainty are expected to provide OTC market participants with a better experience in regard to risk management and streamlined post-trade operations.

“As OTC derivatives markets become increasingly fragmented, market participants are seeking to more effectively manage their risk and optimize their balance sheets. By combining the strengths of these diverse businesses into one organization, the joint venture will be better positioned to serve clients worldwide by driving innovation, developing valuable products and providing operational efficiencies”, Terry Duffy, CME Group Chairman and Chief Executive Officer, said at the time.

Traiana, TriOptima and Reset deliver trade processing connectivity, credit controls, optimization, and risk mitigation solutions.

MarkitSERV provides end-to-end trade processing and workflow solutions that support all participants across the derivatives and FX markets, from post-trade notices of execution, trade confirmation and allocations to clearing and reporting.

With the customary antitrust and regulatory approvals being confirmed, IHS Markit will now make an equalization payment of $113 million to CME Group to achieve 50/50 ownership and shared control in the joint venture.

IHS Markik, at the same time, is being acquired by S&P Global Inc for $44 billion in stock. The deal will create a new data powerhouse, but is also subject to regulatory approval from the European Commission.

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