UK competition regulator approves proposed acquisition of NEX by CME

Maria Nikolova

NEX and CME confirm that they have received clearance from the UK Competition and Markets Authority for the planned deal.

NEX Group PLC (LON:NXG) and CME Group Inc (NASDAQ:CME) have earlier today confirmed that they have received clearance from the UK Competition and Markets Authority (CMA) for the planned acquisition of NEX by CME and Bidco.

Earlier this month, the companies said they had received approval under the Hart-Scott-Rodino Act from the United States Department of Justice – Antitrust Division for the proposed deal. Furthermore, CME and NEX said that they had received the relevant regulatory approvals from the Financial Conduct Authority (FCA) and regulators in the United States, Germany, Italy and Sweden, and had made the requisite pre-notifications in Hong Kong.

After the receipt of the CMA approval, all of the conditions relating to regulatory and antitrust approvals have now been satisfied or (where capable of waiver) waived.

The Scheme remains subject to certain conditions including sanction by the Court at the Court Hearing (expected to take place on November 1, 2018) and the delivery of a copy of the Court Order to the Registrar of Companies. Subject to the Scheme receiving the sanction of the Court and the delivery of a copy of the Court Order to the Registrar of Companies and the satisfaction or (if capable of waiver) the waiver of the remaining Conditions to the Scheme (as set out in the Scheme Document) the Scheme is expected to become effective on November 2, 2018.

Let’s recall that, as per the agreement, CME will pay 500 pence in cash and 0.0444 new CME shares for each NEX share, thus putting the value of each share of NEX at 1,000 pence. NEX’s entire issued and to be issued share capital is thus valued at approximately £3.9 billion. The bid represents a premium of approximately 49.2% to the Closing Price per NEX Share of 670.5 pence on 15 March 2018 (being the date the Offer Period commenced).

Back in March, the companies announced that NEX Shareholders would be entitled to receive a final dividend for NEX in respect of the year ending March 31, 2018, such dividend not to exceed an amount of 7.65 pence per NEX Share. This dividend has already been paid.

On top of expected cost synergies, CME sees the deal as offering compelling revenue growth opportunities. CME will be able to market its existing product offering to NEX’s attractive customer base whilst CME will also benefit from the opportunity to cross sell NEX products.

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