HomeDiagramsDatabaseMapsForum About
     

Go Back   SkyscraperPage Forum > Global Projects & Construction > General Development


Reply

 
Thread Tools Display Modes
     
     
  #1401  
Old Posted Jul 9, 2007, 4:40 AM
SevenSevenThree's Avatar
SevenSevenThree SevenSevenThree is offline
Registered User
 
Join Date: Jul 2005
Location: Chicago
Posts: 400
Is it premature to say that CME-CBOT merger is a go?

Not sure if Im to post this here but:

http://chicagobusiness.com/cgi-bin/news.pl?id=25589


ICE won't raise offer for CBOT Holdings: WSJ


(AP) — IntercontinentalExchange Inc., in a battle with Chicago Mercantile Exchange Holdings Inc. for control of the Chicago Board of Trade, has decided against increasing its offer for CBOT Holdings Inc., according to a published report.

The Wall Street Journal, citing unidentified people familiar with ICE's deliberations, reported on its Web site Sunday that the Atlanta exchange decided over the weekend it wasn't worth trying to pay more for the CBOT, given the Merc's edge and its increased offer.

On Friday, the Chicago Mercantile Exchange's parent company sweetened its offer by 7 percent and won over Caledonia Investments, the largest shareholder in CBOT Holdings.

The move pushed the bid by Chicago Mercantile Exchange over $11 billion, up from the $8 billion initially proposed last October amid rising stock prices that have helped escalate the deal's value.

ICE's mostly stock-based bid, which had been ahead of the Merc's for most of the last three months, slipped Friday to about $11.7 billion, as CME's share price rose more than ICE's.

A telephone call Sunday seeking comment from ICE spokeswoman Kelly Loeffler on the Journal's report was not immediately returned.

CBOT shareholders are to vote on the Merc's offer Monday. Analysts said Friday that final approval looked secure barring a last-minute boost in the offer by ICE. Four proxy advisory firms have recommended approval of the combination.

Executives of the Merc and Board of Trade, rival exchanges dating to the 19th century, first agreed to combine in October before ICE complicated their plans.

Pairing the two futures and options markets would create the world's largest one-stop futures market for everything from interest rates to pork bellies and may make it the world's largest exchange of any kind by market value, rivaling or outpacing Germany's Deutsche Borse and the New York Stock Exchange.

The CBOT board of directors has always preferred the Merc's offer, maintaining its trading technology is superior to ICE's and that the two Chicago exchanges would make a stronger business combination.

Federal regulators signed off on the proposed combination last month.
__________________
Satan (impatiently) to Newcomer: The trouble with you Chicago people is, that you think you are the best people down here; whereas you are merely the most numerous.
- - - Mark Twain "Pudd'nhead Wilson's New Calendar," 1897
Reply With Quote
     
     
  #1402  
Old Posted Jul 9, 2007, 4:43 AM
SevenSevenThree's Avatar
SevenSevenThree SevenSevenThree is offline
Registered User
 
Join Date: Jul 2005
Location: Chicago
Posts: 400
Quote:
Originally Posted by SamInTheLoop View Post
Man - is Spertus an absolute gem or what! This gives me optimism that real Architecture - architecture with a capital "A" (completely forward-thinking, without a hint of timid, apologetic BS moves) is truly making a comeback in this city...
I agree. My only complaint is about the glass. I was hoping for a more crystaline finish. I wanted it to shine like a diamond. Great project nonetheless.
__________________
Satan (impatiently) to Newcomer: The trouble with you Chicago people is, that you think you are the best people down here; whereas you are merely the most numerous.
- - - Mark Twain "Pudd'nhead Wilson's New Calendar," 1897
Reply With Quote
     
     
  #1403  
Old Posted Jul 9, 2007, 4:44 AM
Loopy's Avatar
Loopy Loopy is offline
Registered User
 
Join Date: Nov 2005
Posts: 665
^The glass is dirty and has never been cleaned. Wait until they clean that glass and light it from within.

Schwwwwwwwwing!
Reply With Quote
     
     
  #1404  
Old Posted Jul 9, 2007, 1:09 PM
Via Chicago Via Chicago is offline
Registered User
 
Join Date: May 2006
Location: Chicago, IL
Posts: 5,611
Quote:
Originally Posted by SamInTheLoop View Post
Man - is Spertus an absolute gem or what! This gives me optimism that real Architecture - architecture with a capital "A" (completely forward-thinking, without a hint of timid, apologetic BS moves) is truly making a comeback in this city...
There was an article in Crains today about the architects:

http://www.chicagobusiness.com/cgi-b...ticle_id=28056
No small plans for design duo
How an obscure firm became the hottest name in Chicago architecture


Millennium Park's Crown Fountain — an admixture of cascading water, black granite and gigantic faces projected onto glass block — has been a stepping stone for the architects who brought it to life.

Ronald Krueck and Mark Sexton, the duo who took the fountain from concept stage to reality, are suddenly the hottest architects in town.

"Their star is rising," says Lynn Osmond, CEO of the Chicago Architecture Foundation.

Messrs. Krueck and Sexton are now bringing their decidedly modern style to two projects along Michigan Avenue.

The latest commissions, the firm's first museums, will be a test of this city's appetite for their approach. They've won the assignment to design the Chicago Children's Museum, a project that's controversial for its proposed location in Grant Park and which could be more controversial still if the design proves too avant-garde for its critics' tastes.

They also designed the almost-complete Spertus Institute of Jewish Studies nearby, its facade a puzzle of 726 glass panels in 556 different shapes standing out from the brick-and-masonry structures near it on a landmarked stretch of South Michigan Avenue — not to everyone's delight.

"I don't like it," says Martin Tangora, a board member of Landmarks Illinois, a Chicago advocacy group. "It's hard for me to see how anyone could believe it conforms to the guidelines of the Landmark Commission."

Still, modern art and architecture are having their moment in and around Millennium Park, from the mercury drop-like Cloud Gate sculpture to the Crown Fountain to the flames of polished steel that Frank Gehry placed atop the Jay Pritzker Pavilion.

"In societies in general, it's a pendulum in terms of how adventurous they want to be about their surroundings," says Chicago architect Carol Ross Barney, who competed for the Spertus and Children's Museum jobs. "We're at a point now where a number of important people and communities want to see things we haven't seen before."

OPPORTUNITY KNOCKS

It's ironic that the Crown Fountain helped lift Krueck & Sexton Architects Ltd. from relative obscurity to winning the high-profile museum commissions that architects covet. They initially turned the fountain job down, in part because they consider their firm a design shop and the concept for the fountain had already been created by Spanish artist Jaume Plensa.

But the challenge of devising an invisible structure for the fountain's towers, which had stumped two previous architecture firms, eventually won them over. "It's easy to envision now that it's done," Mr. Sexton says. "But then, it was like seeing an airplane before there were any airplanes."

The opportunity to work with the billionaire Crown family didn't hurt, either. "We felt all along that whoever worked on the fountain . . . would have visibility and this would help whoever was involved," says A. Steven Crown, a general partner with Henry Crown & Co. who oversaw the project. "The fountain turned out to be better than any of us anticipated."

While Messrs. Krueck and Sexton have worked together for more than 25 years, they have mostly done residential and corporate office work in Chicago. They are known in architecture circles, particularly because of their longevity as partners — a rarity in the business — and their daring designs, but they haven't been household names.

Mr. Krueck, 60, grew up outside Cincinnati. His family was in the grocery business, and he says his father wasn't terribly supportive of his interest in art and architecture. Not long after receiving his degree in architecture, he tried his hand at painting for a while, studying at the Art Institute of Chicago.

Mr. Sexton, 51, whose father worked as a maintenance man for Otis Elevator before starting his own elevator company, grew up in west suburban Riverside.

MODERN TIMES

Both are products of the Illinois Institute of Technology, where Mr. Krueck also was a professor. IIT, marked by the stripped-down aesthetic of the master who planned its campus, Ludwig Mies van der Rohe, launched Messrs. Krueck and Sexton in the direction of modernism. Their firm endured some lean years as modern architecture went out of vogue.

"There were very few chances for us to build the work that we've been involved with for a number of years," Mr. Krueck says.

But in the past five years, Krueck & Sexton's revenue has doubled to about $2.75 million.

The Spertus, at 610 S. Michigan Ave., is already raising Krueck & Sexton's profile.

Spertus President Howard Sulkin says that last fall he was at a fundraiser for the U.S. Holocaust Memorial Museum when he ran into Mayor Richard M. Daley. The mayor asked whether the Spertus building would wind up looking like the architect's drawing — which the mayor said he had in his office and was showing people involved in the city's Olympics bid.

"This is a very special project," Mr. Sulkin says. "One of our goals . . . was to make a significant contribution to the resurgence of the Chicago School of architecture."

Messrs. Krueck and Sexton realized the Spertus "would be a life-changing commission," Mr. Sexton recalls. "When you're on the same street as Louis Sullivan and Daniel Burnham, you're on a pretty amazing street."

The two will now increasingly be competing with better-known names to land higher-profile work and more lucrative assignments.

Their biggest project outside Chicago is under construction in Washington, D.C., where they have designed a speculative office building for New York real estate developer Tishman Speyer Properties L.P.

"We'd like a more national and international presence," Mr. Sexton says. "The truth is there are only so many cultural institutions in any city."
Reply With Quote
     
     
  #1405  
Old Posted Jul 9, 2007, 1:11 PM
Via Chicago Via Chicago is offline
Registered User
 
Join Date: May 2006
Location: Chicago, IL
Posts: 5,611
So I'm confused. ICE can keep upping its bid, even after the vote today?

http://www.chicagobusiness.com/cgi-bin/news.pl?id=25594
ICE chief mum on whether it will boost CBOT offer

(Reuters) — The head of the IntercontinentalExchange Inc. on Monday declined to say whether the ICE would offer a higher bid for the Chicago Board of Trade.

ICE is in a battle with the Chicago Mercantile Exchange to purchase the Chicago Board of Trade. The CME on Friday increased its takeover offer for CBOT to $11.9 billion, besting the ICE's current offer worth about $11.8 billion.

"I can't talk about it. Give me a break," ICE Chairman Jeffrey Sprecher told Reuters before testifying at a Senate hearing on excessive speculation in U.S. natural gas markets.

Sprecher also declined to say if the ICE would wait to make a decision on whether to make a new bid until after CBOT shareholders finish voting on Monday on the CME's offer.
Advertisement
Related Article Topics | Related Industry News

As for what is next for ICE if it loses the CBOT bid, Sprecher would not say if his exchange could become a takeover target itself.

Last edited by Via Chicago; Jul 9, 2007 at 7:42 PM.
Reply With Quote
     
     
  #1406  
Old Posted Jul 9, 2007, 8:21 PM
sentinel's Avatar
sentinel sentinel is offline
Plenary pleasures.
 
Join Date: Oct 2004
Location: Monterey CA
Posts: 4,204
^^ I think it depends on the vote ratio and how high the percentage of votes FOR the CME-CBOT partnership are vs. the "No's"; If it's a 9-1 margin which is what some analysts are speculating, then I think ICE will not try to outbid CME because then they would be over-valueing what CBOT is worth and I doubt ICE's shareholders would approve of an even higher bid.
__________________
Don't be shy. Step into the light.
Reply With Quote
     
     
  #1407  
Old Posted Jul 9, 2007, 8:42 PM
sentinel's Avatar
sentinel sentinel is offline
Plenary pleasures.
 
Join Date: Oct 2004
Location: Monterey CA
Posts: 4,204
Game over:

CBOT-Merc merger approved
Two former rivals join to create world's largest futures exchange


By Robert Manor
Tribune staff reporter
Published July 9, 2007


The shareholders of the Chicago Board of Trade appeared to overwhelmingly approve a merger with the Chicago Mercantile Exchange today, creating the largest derivatives market ever.

Final vote totals won't be available for several days, but CBOT Chairman Charles Carey said Monday afternoon "preliminary indications are this thing is going to pass overwhelmingly."

"We are now going to be on the world stage," said Leo Melamed, chairman emeritus of the Merc and the man most responsible for futures trading of financial instruments.

The $11.9 billion deal culminates ends more than four months of jockeying between Chicago Mercantile Exchange Holdings Inc. and upstart IntercontinentalExchange Inc. to acquire the 159-year-old Chicago Board of Trade.

Intercontinental, an Atlanta-based energy exchange, waged an aggressive proxy fight, urging shareholders of CBOT Holdings Inc., CBOT's parent company, to vote against the merger, which would have cleared the way for ICE's competing offer.

ICE offered as much as $11.7 billion, but refused to raise its offer on Friday when the Merc raised its bid a third time to win over CBOT's largest shareholder, Caledonia Investments, based in Australia.

The Merc's higher bid, improved from the $8 billion first offered in October, won over Caledonia and sealed the deal.

While the merger ends a sometimes rancorous competition between the two exchanges that dates back decades, it solidifies Chicago's role as a global center for the trade of derivatives.

Known as "derivatives," the contracts changing hands at the Merc and Board of Trade are a step removed from investments in tangible goods and are used hedge risks or place bets on market movements, providing leverage that can turn small fortunes into big ones.

The new exchange will have average daily trading volume approaching 9 million contracts per day, easily surpassing all of its direct competitors, with a market capitalization of more than $25 billion.

John Lothian, editor of the John Lothian Newsletter which cover exchange issues, said that after the merger is completed, the combined exchanges won't be satisfied with being simply the world's largest.

"We are in an age of consolidation," Lothian said. "They will be looking at acquiring exchanges."

The Merc's proposal for the CBOT in October offered a deal that would eventually come to involve both stock and cash. But a competing offer by ICE appeared to have the edge for months, as it promised shareholder as much as $25 a share more than the Merc, depending on the price of ICE and Merc stock.

Leaders of both exchanges have said the Merc takeover bodes well for the city. Mayor Richard Daley, who once separated a pair of exchange leaders who had a shouting match in his City Hall office, predicted the combination will be "good for the Chicago economy" when the merger was first proposed.

Though the exchanges directly employ fewer than 2,200, a number expected to shrink by several hundred after merger-related layoffs, they generate tens of thousands of local jobs through their trading activity.

The deal approved today is going to go a long way to make sure those jobs stay in Chicago, Merc Chairman Terrence Duffy, who will serve as chairman of the combined CME Group Inc., said earlier.

Both the Merc and Board of Trade got their start in corn, soybeans, butter, eggs and other agricultural commodities, and their rough-and-tumble traders still set benchmark prices for the global farm economy. During the 1970s and '80s, the exchanges hit it big by applying the same trading formula that worked for pork bellies to bonds, foreign currencies and stock indexes.

rmanor@tribune.com



Copyright © 2007, Chicago Tribune
__________________
Don't be shy. Step into the light.
Reply With Quote
     
     
  #1408  
Old Posted Jul 9, 2007, 8:46 PM
Via Chicago Via Chicago is offline
Registered User
 
Join Date: May 2006
Location: Chicago, IL
Posts: 5,611
Personally, I think this is huge. There will always be another shot at a 2000' building, or an Olympics. But this was a 1 shot deal.
Reply With Quote
     
     
  #1409  
Old Posted Jul 9, 2007, 9:12 PM
wrab's Avatar
wrab wrab is offline
Deerhoof Evangelist
 
Join Date: May 2005
Location: Chicago
Posts: 3,670
CME/CBOT Merger

Quote:
Originally Posted by Via Chicago View Post
Personally, I think this is huge. There will always be another shot at a 2000' building, or an Olympics. But this was a 1 shot deal.
Huge indeed - and great news.
Reply With Quote
     
     
  #1410  
Old Posted Jul 10, 2007, 3:25 AM
mcfinley mcfinley is offline
Not my real name
 
Join Date: Jan 2007
Posts: 265
The CBOT-Merc deal is great for Chicago, possibly the most important transaction the city will see for a generation. Now, I'd like to see the company consolidate its gains for a few years so it could leverage a clean buyout of another exchange down the road.
__________________
My posting frequency is directly proportional to my level of procrastination
Reply With Quote
     
     
  #1411  
Old Posted Jul 10, 2007, 3:49 AM
honte honte is offline
Registered
 
Join Date: Mar 2006
Location: Chicago - every nook and cranny
Posts: 4,628
^ ICE perhaps?
Reply With Quote
     
     
  #1412  
Old Posted Jul 10, 2007, 3:55 AM
mcfinley mcfinley is offline
Not my real name
 
Join Date: Jan 2007
Posts: 265
^^^
Hell, Chicago's got a penchant for thinking big. Is a European exchange too greedy?
__________________
My posting frequency is directly proportional to my level of procrastination
Reply With Quote
     
     
  #1413  
Old Posted Jul 10, 2007, 4:09 AM
Beck4ABigChicago's Avatar
Beck4ABigChicago Beck4ABigChicago is offline
Registered User
 
Join Date: Jan 2007
Posts: 246
I am reading that this will not only be the biggest derivatives market in the world, but also likely the largest market for anything in the world, surpassing the NYSE and the German Exchange. Anyone confirm this?
__________________
"Chicago doesn't need Bryant to feel like a big-time player, just as it doesn't need Donald Trump to build a tower downtown to feel adequate. Nice that Trump's doing it, but when you have the Sears Tower and the Hancock building, you're pretty secure with who you are. And when somebody named Michael Jordan has graced your presence, somebody named Kobe Bryant isn't going to shake your world." Rick Morrissey, 2007
Reply With Quote
     
     
  #1414  
Old Posted Jul 10, 2007, 4:12 AM
the urban politician the urban politician is offline
The City
 
Join Date: Jul 2004
Location: Chicago region
Posts: 21,375
^ That seems to be the going presumption.

Does anyone else think that ICE should move to Chicago anyway, like it was planning to do?

Bah! Who cares. It's gonna get bought out by NYSE Group anyhow..
__________________
Supercar Adventures is my YouTube channel:

https://www.youtube.com/channel/UC4W...lUKB1w8ED5bV2Q
Reply With Quote
     
     
  #1415  
Old Posted Jul 10, 2007, 5:09 AM
rgolch's Avatar
rgolch rgolch is offline
Registered User
 
Join Date: Dec 2004
Posts: 887
Quote:
Originally Posted by the urban politician View Post
^ That seems to be the going presumption.

Does anyone else think that ICE should move to Chicago anyway, like it was planning to do?

Bah! Who cares. It's gonna get bought out by NYSE Group anyhow..
Maybe not if the new CME can outbid, and buy it first.
Reply With Quote
     
     
  #1416  
Old Posted Jul 10, 2007, 5:27 AM
firstcranialnerve firstcranialnerve is offline
Registered User
 
Join Date: Apr 2007
Location: Streeterville, Downtown Chicago, 42nd ward
Posts: 120
Largest Exchange?

Hmm, I'm not sure how we can say its the largest exchange. NYSE merged with Euronext, and 70% of the CME trading volume is in the CME Euronext Globex system online. Trying to make CME bigger than NYSE Euronext is tail chasing? Do I have this right?
Reply With Quote
     
     
  #1417  
Old Posted Jul 10, 2007, 5:28 AM
honte honte is offline
Registered
 
Join Date: Mar 2006
Location: Chicago - every nook and cranny
Posts: 4,628
Quote:
Originally Posted by the urban politician View Post
^Does anyone else think that ICE should move to Chicago anyway, like it was planning to do?
Well, that was the promise. Whether or not they follow through may be a partial indication just how full of hot air the whole thing was.
Reply With Quote
     
     
  #1418  
Old Posted Jul 10, 2007, 5:57 AM
left of center's Avatar
left of center left of center is offline
1st Ward
 
Join Date: Sep 2006
Location: The Big Onion
Posts: 2,569
Quote:
Originally Posted by Beck4ABigChicago View Post
I am reading that this will not only be the biggest derivatives market in the world, but also likely the largest market for anything in the world, surpassing the NYSE and the German Exchange. Anyone confirm this?
The CME was already the world's largest exchange in terms of market capitalization before this entire deal was even formulated. The CBOT i believe was third, behind the NYSE. Regardless of the merger, Chicago controlled 85% of US derivatives trading and half of global derivatives trading. The only immediate difference now is that the newly formed CBOT/CME will be able to fend off any acquisition attempts, and possibly acquire other exchanges. (NASDAQ, anyone?)

I'm just glad that ICE was barred from investing in any of the Chicago exchanges. This will end up being very good for the city.
Reply With Quote
     
     
  #1419  
Old Posted Jul 10, 2007, 2:29 PM
Via Chicago Via Chicago is offline
Registered User
 
Join Date: May 2006
Location: Chicago, IL
Posts: 5,611
http://www.chicagobusiness.com/cgi-bin/news.pl?id=25602
What's next for the Chicago Merc?

AP) — Today, Chicago. Tomorrow, the world?

Even before the Chicago Mercantile Exchange's $11.9 billion purchase of the crosstown Board of Trade won final approval from shareholders, industry experts were speculating on possible acquisitions ahead for the new juggernaut of the financial exchange industry.

The targets, analysts suggest, could include other large exchanges from New York to London and beyond.

``The fact that they're talking so much about being global, I think that means something,'' Michael Henry, an exchange expert for consulting firm Accenture Ltd., said from Paris.

CME Group Inc., the company being created from Chicago Mercantile Exchange Holdings Inc.'s acquisition of CBOT Holdings Inc., should have plenty of resources to go after another company after completing the integration that the two exchanges began planning last October.

The green light to go ahead with the combination came Monday from shareholders of both parent companies in votes that reflected the sweetening of the Merc's bid three days earlier. IntercontinentalExchange Inc. effectively conceded the four-month bidding contest for the Board of Trade by not coming back with a final offer.

That left the Merc, the No. 1 futures markets by volume, and CBOT, which is ranked third, free to pair up after more than a century of competition against one another. The seemingly unlikely union ultimately made sense in an era of increasing consolidation and rapid growth in electronic trading.

``The trend of the industry is you have to get bigger or get out,'' said Harlan Krumpfes, an agriculture trader at the Board of Trade since 1975, after casting his vote in favor of the Merc's proposal.

The all-Chicago exchange still won't have a strong presence in energy futures and doesn't have stocks, so those could be on its wish list, according to Henry.

``I think the global exchange landscape is going to be dominated by companies that have a larger product range than they have. So I think a reasonable move might be to buy a big European exchange,'' he said, suggesting the London Stock Exchange as a potential target.

Chicago-based analyst Patrick O'Shaughnessy of Morningstar agreed that an international transaction might make sense for CME. So might a tie-up with the New York Mercantile Exchange, since the Merc already provides an electronic trading platform for Nymex products.

He noted that there has yet to be a deal in which a futures exchange buys a stock exchange.

``I don't think more mergers are inevitable, but I think that they're logical,'' O'Shaughnessy said.

Executives of the combined company, who used the word ``global'' multiple times in comments after Monday's votes, haven't ruled out anything.

``Starting on Day One, our combined company will be ready to compete in the global environment well-armed for growth and innovation,'' said Bernard Dan, CBOT president and chief executive.

Traders and shareholders will pocket huge amounts from the deal, softening any blow from the end of 159 years of independence for the Board of Trade. There are other consolations, too: The older exchange's Art Deco headquarters will house the combined firm's trading operations, and CME Group will be formally called ``a Chicago Board of Trade company.''

``It's a happy day, it's a moving-forward day — it's kind of an inevitable day,'' said Jerome Israelov, 43, a wheat trader at the Board of Trade. ``It's just a logical move forward for the industry.''
Reply With Quote
     
     
  #1420  
Old Posted Jul 10, 2007, 2:57 PM
bnk bnk is offline
BANNED
 
Join Date: Mar 2006
Location: chicagoland
Posts: 12,741
http://www.chicagotribune.com/news/n...ationworld-hed

THE HISTORIC MERC-BOARD OF TRADE DEAL

City 'on the world stage'
Biggest commodities market may target other exchanges




By Robert Manor
Tribune staff reporter

July 10, 2007

The Chicago Mercantile Exchange and the Chicago Board of Trade won their bruising battle for a merger Monday, creating a behemoth that cements the city's status as an international center of finance.

The $11.8 billion combination of the Merc and the CBOT puts an end to decades of rivalry between the two downtown trading pits and makes Chicago home to the largest market in the world for commodities and financial instruments. This comes at a time when exchanges from Germany to Canada are growing rapidly and acquiring each other.

"The derivative center will be Chicago," declared Leo Melamed, chairman emeritus of the Merc and one of the visionaries responsible for a futures market to trade financial instruments. "We are now going to be on the world stage."

The merger, first announced last October, almost didn't come together because of the surprise intervention of Atlanta-based IntercontinentalExchange Inc., an upstart that set off a bidding war for the CBOT. Although ICE didn't get its way, it forced the Merc over months of back-and-forth to come up with about $3 billion more to seal the deal.

With their final offers equal in values, CBOT shareholders finished voting Monday afternoon whether to approve the merger, leading Charles Carey, the CBOT's chairman, to announce: "Preliminary indications are this thing is going to pass overwhelmingly." While the final tally isn't due for days, enough votes had been cast early to assure a Merc victory.

A merger of the Merc and Board of Trade was once unthinkable, so different were they in cultures and so cut-throat was their competition. But in the past decade, as the rise of electronic trading broke down ideas about what could be traded and where, the industry underwent a seismic shift. Nearly all the markets, once clubby and local institutions, are now publicly traded, for-profit enterprises with global reach and 24-hour business cycles.

These changes were dramatic enough to bring the two Chicago markets together, and they almost certainly mean there will be more combinations, a trend that already spans continents.

John Lothian, editor of a newsletter that covers exchange issues, said the Chicago behemoth won't be satisfied with being simply the world's largest.

"We are in an age of consolidation," Lothian said. "They will be looking at acquiring exchanges."

The Merc traces its history to 1898, when it was known as the Chicago Butter and Egg Board. It adopted its current name in 1919. The Chicago Board of Trade was established in 1848 to trade in corn, wheat, oats and soybeans.

That elemental system of commodities trading evolved since the early 1970s into a system of trading risk and security in everything from currencies to interest rates to fluctuations in the weather, although agricultural commodities remain a major business.

For generations, the system involved people trading futures contracts face to face on giant trading floors. That continues today, but the bulk of trading has migrated to electronic platforms in which people can participate in markets such as Chicago's but never step foot here.

The CBOT is to adopt the Merc's Globex electronic system next year, while the floor traders of the Merc will migrate to the pits at the CBOT. They already shared essential back-office functions, one of the reasons why the managements of the two exchanges favored combining.

Melamed saw the future in electronic trading.

"I have been a proponent since 1987," he said. "At the time, I thought [floor trading] would be gone in five or 10 years.

"I was wrong," he said, adding that he is now leery of predicting how much longer face-to-face trading will last.

"Who is to argue with it?" he said. "If the customers want it, give it to them."

The speculation now is that after a period of integration, the Merc will go on the prowl again to bulk up its trading capacity and secure a wider variety of products to offer. Industry observers expect many of the world's exchanges eventually will be owned by a few elite holding companies. This year, for example, the New York Stock Exchange merged with Euronext, which trades derivatives throughout Europe.

"The exchange markets are going to be dominated by three or four large companies," predicted Michael Henry, senior executive of consulting firm Accenture's capital markets practice.

The Merc merger with CBOT is a bid to become one of those big players, and Henry said he expects the company to go after an overseas exchange. "They are saying, 'We want to be a major player, we want to be global,'" Henry said.

Jon Najarian, a CBOT trader, said the Merc might not have to look anywhere exotic for a purchase. The Chicago Board Options Exchange, which trades options on stocks, is a very short walk from the Chicago Board of Trade building.

Members of the CBOT have the right to a seat on the CBOE, although the options exchange has asked federal regulators to extinguish that right under the argument that after the merger, the CBOT no longer will exist.

"The CBOE is a logical fit," Najarian said.

Najarian also said he expects the Merc to go after businesses now held by ICE and the New York Mercantile Exchange. Both of those exchanges trade energy futures, a fast-growing part of the derivatives industry.

"They will be so big," Najarian said of the merged exchanges, "that they can go after anything they want."

Among the growth markets of the future are China and India, where an increasingly wealthy and sophisticated class of business people are expected to avail themselves of financial derivatives. While the two countries' governments restrict foreign ownership of exchanges, the usefulness of derivatives to businesses could be lucrative for exchanges located elsewhere.

Stuart Ellison, a trader at the CBOT for 31 years, sees the potential.

"The timing is perfect for this marriage," Ellison said. He said he was glum when he voted for the Merc's offer last week because the price was lower than ICE's, but his mood lifted when the richer offer was announced Friday.

"All of a sudden, everybody is smiling," Ellison said.

The Merc proposed to the CBOT in October, offering a deal that would eventually come to involve both stock and cash. But the competing offer by ICE appeared to have the edge for months. Then on Friday the Merc effectively matched the ICE offer, leading that exchange to give up. Merc shareholders also approved the merger.

The merged exchanges have a capital market value of about $30 billion.

Many details of the merger remain to be worked out. For example, with its two cavernous trading floors emptied, what will be done with the massive Merc building at 20 S. Wacker Drive?

"We will have an announcement about real estate later," said Merc spokesman Allan Schoenberg.

"I'm waiting for the world's largest Starbucks," he said.
Reply With Quote
     
     
This discussion thread continues

Use the page links to the lower-right to go to the next page for additional posts
 
 
Reply

Go Back   SkyscraperPage Forum > Global Projects & Construction > General Development
Forum Jump


Thread Tools
Display Modes

Forum Jump


All times are GMT. The time now is 5:30 AM.

     
SkyscraperPage.com - Archive - Privacy Statement - Top

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2024, vBulletin Solutions, Inc.