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Boca Raton: Analysts who follow the two largest US futures marts are braced for word within days that CME Group has finalised terms of a deal to swallow New York Mercantile Exchange parent Nymex Holdings.
"Most people feel pretty comfortable that it will go through," Daniel Harris, analyst at Goldman Sachs, said while speaking on a panel at the Futures Industry Association meeting . "The deal is probably moving on the path toward an announcement."
The companies had set today as the deadline for an exclusive negotiating period. That has heightened prospects for an announcement early this week, if not before.
A deal would need approval from the US Department of Justice (DoJ), which recently has shown some queasiness about CME Group's commanding position in the futures industry. CME Group was formed in 2007 by the merger of the Chicago Mercantile Exchange and Chicago Board of Trade.
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It dominates trading in financial futures, grains and livestock. The acquisition of Nymex would add energy and precious metals contracts to the mix.
In February, the DoJ called for a shake-up in financial futures exchanges, including an end to exchanges owning or controlling the lucrative business of clearing trades.
Now, the agency could be asked to rule on a deal that would push CME's market share in the US futures and options on futures business to more than 95 per cent.
"Until there's the stamp of approval, there are always some question marks," said analyst Howard Chen of Credit Suisse Securities. "But in general most people believe the deal is going to happen."
One trading firm official said DoJ seems "frustrated" by CME's huge market share - but within standard antitrust parameters had no reason to turn down the CBOT deal, and probably none to reject a NYMEX deal either.
Unlike the CME-CBOT deal, which faced last-minute competition from InterContinental Exchange, industry watchers guess there is probably no alternative buyer lurking for Nymex.
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