UPDATE: CME: Committed To Organic Growth In Core Derivatives Business

The executive chairman of CME Group Inc. (CME) said Tuesday that the futures exchange operator wouldn't waver from its main business of futures trading, as reports swirled that the derivatives exchange operator may look to participate in the merger push reshaping the exchange business.

CME has been reported to be in talks with Nasdaq OMX Group Inc. (NDAQ) on a possible response to the merger between NYSE Euronext (NYX) and Deutsche Boerse AG (DB1.XE, DBOEF), which was approved by those two companies' boards early Tuesday.

"We're not going to let [M&A activity] deter our focus from our core business," said Terry Duffy, executive chairman of CME, in an interview Tuesday in Washington.

CME, alongside Nasdaq OMX and other major exchange groups, is seen pressured by a spate of exchange dealmaking, including the NYSE-Deutsche Boerse deal. Separate tie-ups are being negotiated between Toronto's TMX Group (X.T, TMXGF) and the London Stock Exchange Group PLC (LSE.LN), and Singapore Exchange and Australian market operator ASX Ltd. (ASX.AU).

CME was reported Monday to be exploring a possible counteroffer for the Big Board parent, with Nasdaq OMX as a potential partner in such a deal. Fox Business Network reported Tuesday that the two exchanges were meeting to discuss strategy. Fox Business Network is owned by News Corp. (NWSA, NWS.AU), which also owns Dow Jones & Co., publisher of The Wall Street Journal and Dow Jones Newswires.

A statement from CME early Tuesday said the Chicago-based operator was "committed to creating shareholder value by executing our strategy to pursue organic growth opportunities in our core derivatives business, expand globally, and extend our capabilities into OTC markets and index services."

While CME will watch the fresh round of consolidation remaking the global exchange business, "it is not our policy to comment on rumor or speculation," according to the statement. A spokesman declined to comment on the reported talks with Nasdaq OMX.

A spokesman for Nasdaq OMX declined comment Monday.

CME shares were 1.4% lower Monday at $298.50 after the NYSE Euronext-Deutsche Boerse deal was approved by both companies' boards. Nasdaq OMX shares were 5.1% lower at $28.12.

The Chicago operator was among the most active acquirers in the 2006-2007 dealmaking that swept the exchange segment, spending about $20 billion in purchases of the Chicago Board of Trade and the New York Mercantile Exchange to create the world's largest platform for trading futures contracts.

The onset of the credit crisis, which hit many of CME's biggest customers hard and left little reason to hedge against record-low interest-rates, roughly halved CME's market value, recently $20.3 billion.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

CME (NASDAQ:CME)
Historical Stock Chart
From May 2024 to Jun 2024