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CME reaches USD126m deal to buy Kansas City Board of Trade.


18 October 2012 - US derivatives exchange CME Group Inc (NASDAQ:CME) unveiled a definitive cash deal worth USD126m (EUR96.2m) to buy Kansas City Board of Trade (KCBT), a futures market for hard red winter (HRW) wheat, in a move that would boost its agricultural product offering.

In addition to the price, KCBT will make a special distribution of excess cash to its members at closing of the deal with CME. The combination is seen to generate substantial value for both companies shareholders and customers, leading to cross margins benefits and other capital efficiencies for producers and commercial participants as it allows them to reduce costs for managing risk, CMEa[euro](tm)s chief executive Phupinder Gill said in a comment.

KCBTa[euro](tm)s board agreed the deal with CME after considering a partnership with other interested parties as it concluded that CME was the best fit for its long-term goals, chairman Steven Campbell said. Its decision to find a partner with CMEa[euro](tm)s technology, expertise and resources was prompted by the growing operational demands and regulatory requirements, Campbell said further, adding that KCBTa[euro](tm)s key HRW wheat product makes a logical and valuable addition to the buyera[euro](tm)s global grains complex.

CME Group has pledged to keep for at least three years a committee of KCBT market participants to advise on HRW wheat contract terms and conditions and to maintain the KCBT trading floor in Kansas City for a minimum of six months.

Completion is expected later in 2012, subject to the approval of KCBTa[euro](tm)s shareholders and regulators, including the receipt of the Hart-Scott-Rodino (HSR) clearance.

KCBT used the advisory services of George K Baum Capital Advisors and Husch Blackwell LLP, while CME was represented by law firm Skadden, Arps, Slate, Meagher & Flom LLP.Country: USASector: Agriculture/Forestry, Banking/Financial ServicesTarget: Kansas City Board of Trade (KCBT)Buyer: CME Group IncDeal size in USD: 126mType: Corporate acquisitionStatus: AgreedBuyer advisor: Skadden, Arps, Slate, Meagher & Flom LLP


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Publication:M & A Navigator
Date:Oct 18, 2012
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