By Dow Jones Business News, February 25, 2013, 08:15:00 AM EDT
German exchange operator Deutsche Boerse AG (DB1.XE) and U.S. rival CME Group Inc. ( CME ) met twice in recent months to
discuss views on potentially merging the operations, a person familiar with the matter said Monday.
The talks took place at the request of CME, and Deutsche Boerse told CME it wasn't interested in pursuing a merger,
the person said.
Earlier Monday, Deutsche Boerse issued a statement saying it isn't in merger talks with CME, after shares had gained
as much as 10% on speculation tied to a media report.
"As repeatedly communicated, Deutsche Boerse Group's primary strategic focus is on organic growth, mainly by expanding
its business into growth regions in Asia, extending its services for unsecured and unregulated markets, and expanding
its combined market data and IT business," Deutsche Boerse said.
A spokeswoman for CME didn't respond to a request for comment.
The Deutsche Boerse share rally reflected expectation among some investors of another flurry of deal activity as
IntercontinentalExchange Inc. (ICE) pursues its agreed takeover of NYSE Euronext (NYX), whose own planned merger with
the German group was last year blocked by European competition regulators.
Bloomberg News had reported that merger talks between Deutsche Boerse and CME continued after being initiated by CME
Deutsche Boerse shares ended the day up 5.6% in Frankfurt. CME was up 0.4% midday on Nasdaq.
A combination would create a dominant futures-market operator on both sides of the Atlantic, underpinned by contracts
linked to benchmark interest rates and stock indexes.
It would also face fewer antitrust barriers than the proposed deal between Deutsche Boerse and NYSE Euronext that was
blocked by European regulators last year. CME is preparing to launch its own European futures trading unit, which would
compete with the duopoly formed by Deutsche Boerse's Eurex business and the Liffe unit of NYSE Euronext.
Deutsche Boerse, which tried unsuccessfully to break CME's near-monopoly in the U.S. listed futures market, only has a
U.S. options business.
CME last year reached out to NYSE Euronext after the Big Board operators' proposed deal with Deutsche Boerse
collapsed, eyeing a combination with Liffe, people familiar with the talks told Dow Jones last month.
CME Chief Executive Phupinder Gill told investors earlier this month that CME was open to big, international deals if
it brought benefits to CME customers, though he also said that he did not currently see any large deal opportunities.
The U.S. company this year aims to ratchet up its presence in Europe, launching a new futures exchange in London that
will trade versions of its established U.S.-listed contracts. The company already runs a London-based clearinghouse that
processes derivatives transactions.
Deutsche Boerse has several times tried to establish a U.S. beachhead, including a failed attempt to set up a Chicago-
based exchange to compete with CME. Deutsche Boerse owns the New York-based International Securities Exchange, a stock-
CME has a stock-market value of around $19.4 billion, some $7 billion more than its German rival.
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