CBOE Stock Exchange (CBSX) announced today that it has entered into a definitive agreement to acquire the National Stock Exchange, Inc. (NSX), an all-electronic stock exchange which is owned primarily by several nationally-known broker-dealers.
The acquisition will allow CBSX to expand its footprint in the securities exchange space by wholly owning and operating a second exchange.
Plans call for CBSX to operate NSX as a separate exchange, while consolidating data systems and business operations.
The NSX acquisition, which has been approved by CBSX and NSX boards of directors, is subject to Securities and Exchange Commission (SEC) approval and is expected to be finalized in the fall of 2011.
"The acquisition of NSX is an important milestone, marking a new phase of growth at CBSX," CBSX CEO David Harris said. "Economies of scale should enable us to efficiently operate a second exchange and to grow our customer base by providing additional pricing models to the U.S. equities marketplace."
"With the changing landscape of the securities marketplace and after careful consideration, NSX felt it was in the best interests of its customers to pursue an acquisition by a market structure innovator such as CBSX," said Joseph S. Rizzello, NSX CEO. "We are confident that the acquisition by CBSX will be a seamless transition and will enable NSX to continue to showcase its strong infrastructure without any interruption to the outstanding service and technology expected by NSX's customer base."
"As the creator and the largest owner of CBSX, CBOE supports CBSX's effort to acquire another exchange 'medallion' in this highly competitive securities arena," CBOE Chairman and CEO William J. Brodsky said. "In the last few months, CBSX has completed some major initiatives, including this key acquisition, to expand its growth potential."
In July, CBSX relocated its trading operations to the East Coast from Chicago and began trading from the Equinix NY4 IBX® datacenter in Secaucus, NJ. The move was aimed at increasing execution speed for the majority of CBSX's customers, which are located on the East Coast.