This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

CME Group To Acquire Kansas City Board Of Trade

CHICAGO and KANSAS CITY, Mo., Oct. 17, 2012 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, and the Kansas City Board of Trade, the leading futures market for hard red winter (HRW) wheat, today announced they have signed a definitive agreement under which CME Group will acquire the Kansas City Board of Trade (KCBT).

Under the terms of the transaction, CME Group will pay $126M in cash for KCBT. In addition, KCBT will make a special distribution of excess cash to members concurrent with closing. CME Group has committed to maintain a committee made up of KCBT market participants to advise on HRW wheat contract terms and conditions for at least three years, and to maintain the historic KCBT trading floor in Kansas City for a period of at least six months. 

"Global agricultural market participants continue to depend on liquid, transparent risk management tools for price discovery in both established and emerging economies," said CME Group Executive Chairman and President Terry Duffy. "Building on two rich legacies, the combination of KCBT Hard Red Winter Wheat products with our deep and liquid CBOT Soft Red Winter Wheat futures and options markets will provide new trading opportunities for market participants around the world – both on the trading floor and on the screen."

"This transaction creates significant value for customers and shareholders of both companies. While the CBOT and KCBT Wheat contracts are very distinct products with different uses, the ability for producers and commercial participants to hedge their risk in both key benchmarks in one place will produce cross-margining benefits and other capital efficiencies," said CME Group CEO Phupinder Gill. "In addition, product development opportunities here are great for both of our client bases – not only in futures, but also in options that can help market participants manage risk at a reduced cost during targeted timeframes in the crop year."

"Given the increasing operational demands and regulatory requirements, it was deemed beneficial that the KCBT partner with an exchange with the technology, experience, leadership and resources of CME Group," said Steven K. Campbell, KCBT Chairman. "KCBT's flagship HRW wheat product is a logical and valuable addition to CME Group's global grains complex. After considering a number of qualified interested parties, the KCBT's Board of Directors is convinced that the CME Group is the best fit for the long-term goals of our exchange, our product offerings, and in continuing to meet the price/risk management needs of our customers."

"Throughout KCBT's 156-year history, trading has evolved dramatically, with an increasing emphasis on technology in recent years," said Jeff Borchardt, KCBT President and CEO.  "CME Group's position as a global leader in electronic trading access and capability makes them an ideal partner for the future of KCBT's HRW wheat contract, the global benchmark for bread wheat."

The board of directors of KCBT unanimously approved the transaction, which is expected to close later this year pending approval by KCBT shareholders and regulators, expiration of the applicable Hart-Scott-Rodino waiting period and completion of customary closing conditions.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs