January 31st, 2008
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BusinessWeek- Few industry watchers were shocked when word came on Jan. 28 that the Chicago Mercantile Exchange (CME) wants to snap up the New York Mercantile Exchange (NMX), the big energy and precious-metals bourse, for $11 billion. With complementary product lines, shared technology, and the ongoing drive to consolidate exchanges around the world, the announcement that the two exchanges are in talks "wasn’t a huge surprise," says analyst Edward Ditmire of the Fox-Pitt, Kelton research firm.
But now that the long-awaited deal is in motion, rival bidders could emerge, and customers who are already uneasy about merger-mania in the markets could step up their efforts to develop alternatives. Some analysts believe that word of the Nymex talks has opened the door to more industry-changing moves. The deal, which would deepen CME’s hold on global futures trading, could trigger a potent backlash among customers and rivals alike.
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