October 31, 2018 / 7:22 AM / a year ago

Britain approves CME's $5 billion NEX trading platform takeover

FILE PHOTO: A man enters the CME Group offices in New York, U.S., October 18, 2017. REUTERS/Brendan McDermid/Files

(Reuters) - Britain’s competition watchdog on Wednesday cleared exchange group CME’s (CME.O) 3.9 billion pound ($4.96 billion) deal to buy Michael Spencer’s NEX NXGN.L trading platform.

The Competition and Markets Authority (CMA), which last month said it would investigate whether the combination would lessen competition, said that it would not refer the deal for further in-depth scrutiny.

At the time the takeover was announced in March, some analysts had expected regulators to be concerned about the potential dominance of a new entity in some markets, especially U.S. government debt, where CME is already in the top position.

NEX, a financial technology company that matches buyers and sellers of bonds, swaps and currencies, said that all the conditions relating to regulatory and antitrust approvals with regard the CME Group deal have been satisfied.

Shares in NEX, known as ICAP before the sale of its voice-broking business to TP ICAP (TCAPI.L) in 2016, were up 3.5 percent at 1,135 pence at 1334 GMT.

Large exchange mergers, such as the attempted combination of London Stock Exchange (LSE.L) and Deutsche Boerse (DB1Gn.DE), have fallen foul of antitrust hurdles in recent years.

CME’s deal to buy NEX, which will have a combined headquarters in Chicago, is its largest since the financial crisis, when it bought NYMEX for $11 billion in 2008.

Combining the two firms would enable investors to access cash and futures trading and over-the-counter services through one provider, improving access to markets, NEX’s founder and Chief Executive Officer Michael Spencer has said.

Shares of CME, one of the world’s biggest exchange groups and owner of the Chicago Board of Trade and Chicago Mercantile Exchange, were up about one percent.

Reporting by Karina Dsouza and Noor Zainab Hussain in Bengaluru; Editing by Alexander Smith

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