U.S. futures business moving to Chicago

By Tom Stundza -- Purchasing, 3/19/2008 10:54:00 AM

CME Group has agreed to buy the metals-heavy New York Mercantile Exchange for about $9.5 billion. CME Group runs the Chicago Mercantile Exchange and the Chicago Board of Trade. The merger will add energy and metals futures to the CME Group's existing portfolio of financial and agricultural instruments, according to the Chicago Tribune. CME Group’s CEO, Craig Donohue, says he anticipates winning approval from the Justice Department even though the combination would place 98% of the country's futures volume under the Chicago company's control.

The marriage will take 9 months or longer to be consummated and will spell the end of futures trading in New York since the Nymex operations will be closed. The former CME Group gold and silver futures have been sold to NYSE Euronext, an electronic trading exchange. CME Group leadership also tells the Chicago media that the Nymex buyout would give the Middle East and Asia better access to their commodity portfolios, reflecting their argument that competitive issues extend far beyond U.S. borders.