Nasdaq Stock Market Inc, the USA''s second- biggest equity market, plans to buy the loss-making Boston Stock Exchange for about $61 million, to expand trading and enter the clearing business.
The proposed deal does not include the Boston Options Exchange, which is in talks to sell a majority stake to the Montreal Exchange, Canada''s derivatives market. Montreal is already the Boston Options Exchange''s largest shareholder, and plans to increase its stake from 31.4 per cent to 53.2 per cent.
Exchanges worldwide have seen more than $65 billion of M&A deals since 2005, as marketplaces seek to meet demand for low-cost electronic trading in securities and derivatives across time zones. Nasdaq, along with Borse Dubai, agreed last month to buy the Nordic exchange OMX AB for about 32 billion kronor ($4.89 billion).
With this purchase, Nasdaq will gain a second venue for trading, allowing brokerages to execute transactions more easily by posting quotes on both markets. The acquisition will also give Nasdaq control of the regulatory arm of the Boston Options Exchange, as it prepares to enter the faster-growing business of trading equity derivatives.
The acquisition may add to Nasdaq''s earnings a year, the company has said in a statement. The takeover is expected to close by the first quarter of 2008, pending regulatory approval.
Nasdaq expects to save about $14 million annually in clearing fees it currently pays. The Montreal Exchange earlier this year sold a 10 per cent stake to the New York Mercantile Exchange for about $70 million.