After months of competition, wrangling and revised merger proposals, Chicago Mercantile Exchange Holdings Inc., parent of the 109-year-old Chicago Mercantile Exchange (CME), and CBOT Holdings Inc., parent of the 159-year-old Chicago Board of Trade (CBOT), announced Monday that preliminary results indicate the shareholders of both companies have approved their proposed merger and the transaction could be completed in days. The companies said the merger will form the world’s largest and most diverse exchange, providing products in all major benchmark asset classes.

The vote also effectively ends a rival bid for CBOT’s hand from Atlanta-based IntercontinentalExchange (ICE), which had been vigorously courting CBOT’s members and shareholders. Over the past two months, the back-and-forth battle for CBOT had intensified as CME and ICE took turns touting their proposals while attempting to discredit the opposing offer (see Daily GPI, July 9; July 5; July 2). While CME’s offer had the approval of CBOT’s board, ICE continued to attempt to convince CBOT’s membership and shareholders that its offer was “superior” on all fronts. CME’s final offer on Friday was valued at $11.9 billion, while ICE’s most recent offer stood at $11.7 billion.

Putting the icing on the cake, CME and CBOT said Friday that Caledonia Investments PYT. Ltd., CBOT’s largest shareholder, was endorsing the revised merger agreement and was in full support of the CME/CBOT combination.

The results of the CBOT shareholder and member votes are subject to official certification by independent inspectors of the election, IVS Associates, which is expected to occur in the next few days. The companies expect to complete the merger once IVS has certified the results.

“We are pleased that shareholders of both companies have demonstrated support for this groundbreaking merger,” said Terry Duffy, CME chairman. “The combination of CME and CBOT creates a strong international company better positioned to compete with growing global exchanges and the over-the-counter market. The combined company will transform the global derivatives industry and create efficiencies for customers and members while delivering significant benefits to our shareholders.”

CBOT Chairman Charles P. Carey added, “Today’s votes clear the way for us to combine our two great exchanges and begin delivering the value of the merger to our customers and shareholders. We look forward to building on our shared legacies of superior customer service, product innovation and industry leadership to capitalize on the terrific growth opportunities we see in this global marketplace.”

CME CEO Craig Donohue said the transition and integration should be smooth processes. “Our integration teams have been working diligently to prepare for the combination of our two companies, and I’m confident that we will be able to hit the ground running once we close the transaction,” he said. “With this successful vote, we are one step closer to realizing our vision. As a combined company, we will be the world’s premier financial marketplace with unparalleled product breadth and global reach. This vote also ensures that Chicago remains the center for risk management worldwide.”

Upon completion of the merger, the combined company will be called CME Group Inc., a CME/Chicago Board of Trade Company.

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