Cboe Global Markets Agrees to Acquire Chi-X Asia Pacific, Expanding Global Footprint into Australia and Japan
PR88678
CHICAGO, Mar. 25, 2021 /PRNewswire=KYODO JBN/--
- Planned transaction provides Cboe with a single point of entry into Australia
and Japan, two of the world's largest securities markets
- Ownership of Chi-X Asia Pacific helps enable Cboe to expand its global
equities business, including bringing industry-leading block platform, BIDS
Trading, to the Asia Pacific region
- Transaction positions Cboe to further execute on its strategy to build one of
the world's largest global equities and derivatives trading networks, expanding
its global market data offering and access to its proprietary products
- Deal is expected to close in the second or third quarter of 2021, pending
regulatory review
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading
solutions provider, today announced it has entered into a definitive agreement
to acquire Chi-X Asia Pacific Holdings, Ltd. (Chi-X Asia Pacific), an
alternative market operator and provider of innovative market solutions, from
J.C. Flowers & Co. LLC. This acquisition will provide Cboe with a single point
of entry into two key capital markets – Australia and Japan – to help enable it
to expand its global equities business into Asia Pacific, bring other products
and services to the region, and further expand access to its unique proprietary
product suite in the region. The transaction is expected to close in the second
or third quarter of 2021, subject to regulatory review and other customary
closing conditions.
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Ed Tilly, Chairman, President and CEO at Cboe Global Markets, said: "With the
planned acquisition of Chi-X Asia Pacific, we continue to execute on our growth
strategy by broadening our geographic and asset class presence, while enabling
the further extension of our product offerings to our global network of
customers. This is an exciting investment in attractive, growing markets that
will complement our North American and European operations and provide a
foothold in the key Asia Pacific region, positioning us to become a truly
global marketplace for our customers. In a short number of years, the Chi-X
Asia Pacific team has built their business into one of the largest market
operators in Asia Pacific. We look forward to working with them to accelerate
the company's further growth, building on our shared cultures of innovation and
customer-first approach as we aim to bring greater choice to investors in Asia
Pacific."
Chi-X Asia Pacific is one of the most successful alternative market operators
in Asia Pacific, with core operations in Australia and Japan. Chi-X Australia
(CXA), the country's second largest securities exchange achieving an 18.4
percent total market share[1], offers trading in all Australian-listed
securities, as well as the exclusive trading of CXA quoted warrants and ETFs.
Chi-X Japan (CXJ), a leading proprietary trading system for Japanese equities
and third largest equities venue in the country with a 2.7 percent lit market
share[2], offers four trading books including both displayed and non-displayed
mechanisms.
David Howson, currently President of Cboe's European operations will lead the
company's business expansion into the region and has been promoted to
President, Europe and Asia Pacific. Mr. Howson will work closely with the
global Cboe team and with the Chi-X Asia Pacific local management teams led by
Vic Jokovic, Chief Executive Officer at Chi-X Australia and Toru Irokawa,
Representative Director and President at Chi-X Japan, who will continue to lead
their businesses.
Cboe plans to leverage Chi-X Asia Pacific's expansive presence in Asia Pacific
and bring to the region BIDS Trading's industry-leading block trading
capabilities. With BIDS' current network covering major North American and
European equities markets, the addition of Asia Pacific equities is expected to
create a global block trading platform to serve a broader base of customers.
Cboe also expects to enhance investor access to other products and services. In
particular, Chi-X Asia Pacific is expected to provide an expanded distribution
network enabling Cboe to further offer its unique proprietary products to
clients in Australia and Japan.
This deal also creates an opportunity for Cboe to become the global leader in
equities market data, offering comprehensive data from most major markets
around the world including the U.S., Canada, Australia, Japan and 15 European
countries.
The planned acquisition builds on Cboe's newly created Data and Access
Solutions business (
), which combines Cboe Information Solutions with its global market data and
access services into one holistic offering, enabling customers around the world
greater access to all of Cboe's expanded data and analytics capabilities
through a unified offering.
Mr. Jokovic said: "Over the past decade, Chi-X Australia has built an enviable
reputation as an innovative market operator with superior market expertise,
customer service and a pioneering spirit that strongly aligns with Cboe's
legacy of product and market innovation. We are excited to draw upon Cboe's
core strengths as a leading global exchange operator to further enhance the
competitive landscape in the Australian markets with new innovation and market
solutions to better meet customer needs."
Mr. Irokawa said: "Chi-X Japan is currently the only broker-neutral proprietary
trading system in Japan, and remains committed to delivering best execution and
significant cost-savings for both retail and institutional investors through
our superior services and rich set of trading solutions. With Cboe's investment
in Chi-X Japan, we look forward to enhancing our capabilities and bringing
vital competition to help strengthen the efficiency and resiliency of the
entire Japanese equities market."
Australia is the world's 9th largest global economy, representing approximately
$2.2 trillion in market capitalization and averaging 4.6 billion shares traded
a day in its equities market[3]. Japan ranks as the 4th largest global economy,
representing $6.2 trillion in market capitalization with over $5.1 trillion
total value traded annually in its equities market[4].
Cboe plans to fund the transaction with cash on hand, supplemented by existing
credit agreements, if needed. The transaction is expected to close in the
second or third quarter of 2021, subject to regulatory review and other
customary closing conditions. Terms of the deal were not disclosed, however the
company noted that the purchase price is not material from a financial
perspective and is expected to be nominally accretive to the company's adjusted
earnings in 2021. Chi-X Asia Pacific generated approximately $26 million in net
revenue for the twelve months ended December 31, 2020, reflecting a 26 percent
growth rate compared to the prior year, with non-transactional revenue
comprising 67 percent of the overall net revenue. For additional background
information on Chi-X Asia Pacific, see the slide deck available under events
and presentations on Cboe's Investor Relations website at
http://ir.cboe.com/events-and-presentations.
Legal advisors to Cboe Global Markets on the transaction are Sidley Austin LLP
(U.S. and Hong Kong), King & Wood Mallesons (Australia), Nagashima Ohno &
Tsunematsu (Japan) and SyCip Salazar Hernandez & Gatmaitan (Philippines), with
BofA Securities serving as financial advisor.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) provides cutting-edge trading and investment
solutions to market participants around the world. The company is committed to
defining markets through product innovation, leading edge technology and
seamless trading solutions.
The company offers trading across a diverse range of products in multiple asset
classes and geographies, including options, futures, U.S., Canadian and
European equities, exchange-traded products (ETPs), global foreign exchange
(FX) and volatility products based on the Cboe Volatility Index (VIX Index),
recognized as the world's premier gauge of U.S. equity market volatility.
Cboe's subsidiaries include the largest options exchange and the third largest
stock exchange operator in the U.S. In addition, the company operates one of
the largest stock exchanges by value traded in Europe, and owns EuroCCP, a
leading pan-European equities clearing house. Cboe also is a leading market
globally for ETP listings and trading.
The company is headquartered in Chicago with a network of domestic and global
offices across the Americas, Europe and Asia, including main hubs in New York,
London, Kansas City and Amsterdam. For more information, visit www.cboe.com.
About Chi-X Asia Pacific Holdings, Ltd.
Chi-X Asia Pacific Holdings, Ltd. ("Chi-X Asia Pacific") is a leader in driving
marketplace innovation across the Asia-Pacific region. For over a decade the
business has been operating trading venues and generating pioneering products
and services for the benefit of financial markets and the global trading
community. The company believes that modern competition from technology-driven
markets increases overall market volumes and improves investor performance,
providing benefits to all participants. As an alternative market operator,
Chi-X Asia Pacific operates market centers two of the Asia-Pacific region's key
securities trading centers in Australia and Japan, while its Chi-Tech(TM)
technology services units provide technology to its business.
Chi-X Asia Pacific was acquired from its former global parent in 2016 by funds
advised by JC Flowers & Co. LLC and has grown rapidly in the ensuing years.
Chi-X Australia, as the second largest securities exchange in Australia, is
transforming the Australian investment market through its focus on customers
and innovation. Chi-X Australia delivers easy, cost-effective access to local
and global investment opportunities, including a full suite of services for
exchange traded investment products and cash equities as well as an investment
products platform including Warrants, Indices (CXA 200), innovative
Transferable Custody Receipts and ETFs/QMFs. Chi-X Japan, as a leading
proprietary trading system in Japan, operates four equity trading venues,
including both lit and dark, to provide solutions to evolving needs of market
participants and provide members and investors with better trading
opportunities at lower cost under highly transparent rules. Chi-Tech provides
the trading technology platform and support services that keep the Chi-X Asia
Pacific market centers at the forefront of the industry in performance and
reliability.
The company maintains offices in Sydney, Tokyo, Hong Kong, and Manila. For
more information, visit: www.chi-x.com.
Media Contacts
Angela Tu
+1-646-856-8734
atu@cboe.com
Tim Cave
+44 (0) 7593-506-719
tcave@cboe.com
Analyst Contact
Debbie Koopman
+1-312-786-7136
koopman@cboe.com
CBOE-C
CBOE-OE
Cboe(R), Cboe Global Markets(R), Cboe Volatility Index(R), and VIX(R) are
registered trademarks of Cboe Exchange, Inc. Chi-X Asia Pacific, Chi-X
Australia and Chi-X Japan are registered trademarks of Chi-X Asia Pacific
Holdings, Ltd. All other trademarks and service marks are the property of their
respective owners.
Cautionary Statements Regarding Forward-Looking Information
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve a number of
risks and uncertainties. You can identify these statements by forward-looking
words such as "may," "might," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue," and the negative
of these terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other than
statements of historical fact are forward-looking statements. These
forward-looking statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of our future
financial performance based on our growth strategies and anticipated trends in
our business. These statements are only predictions based on our current
expectations and projections about future events. There are important factors
that could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied by the
forward-looking statements.
We operate in a very competitive and rapidly changing environment. New risks
and uncertainties emerge from time to time, and it is not possible to predict
all risks and uncertainties, nor can we assess the impact of all factors on our
business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ include: the
satisfaction of the conditions precedent to the consummation of the proposed
transaction, including, without limitation, the receipt of regulatory approvals
on the terms desired or anticipated; the impact of the novel coronavirus
("COVID-19") pandemic, including changes to trading behavior broadly in the
market; the loss of our right to exclusively list and trade certain index
options and futures products; economic, political and market conditions;
compliance with legal and regulatory obligations; price competition and
consolidation in our industry; decreases in trading or clearing volumes, market
data fees or a shift in the mix of products traded on our exchanges;
legislative or regulatory changes; our ability to protect our systems and
communication networks from security risks, cybersecurity risks, insider
threats and unauthorized disclosure of confidential information; increasing
competition by foreign and domestic entities; our dependence on and exposure to
risk from third parties; fluctuations to currency exchange rates; our index
providers' ability to maintain the quality and integrity of their indices and
to perform under our agreements; our ability to operate our business without
violating the intellectual property rights of others and the costs associated
with protecting our intellectual property rights; our ability to attract and
retain skilled management and other personnel; our ability to minimize the
risks, including our credit and default risks, associated with operating a
European clearinghouse; our ability to accommodate trading and clearing volume
and transaction traffic, including significant increases, without failure or
degradation of performance of our systems; misconduct by those who use our
markets or our products or for whom we clear transactions; challenges to our
use of open source software code; our ability to meet our compliance
obligations, including managing potential conflicts between our regulatory
responsibilities and our for-profit status; our ability to maintain BIDS
Trading as an independently managed and operated trading venue, separate from
and not integrated with our registered national securities exchanges; damage to
our reputation; the ability of our compliance and risk management methods to
effectively monitor and manage our risks; our ability to manage our growth and
strategic acquisitions or alliances effectively; restrictions imposed by our
debt obligations and our ability to make payments on or refinance our debt
obligations; our ability to maintain an investment grade credit rating;
impairment of our goodwill, long-lived assets, investments or intangible
assets; and the accuracy of our estimates and expectations. More detailed
information about factors that may affect our actual results to differ may be
found in our filings with the SEC, including in our Annual Report on Form 10-K
for the year ended December 31, 2020 and other filings made from time to time
with the SEC.
We do not undertake, and we expressly disclaim, any duty to update any
forward-looking statement whether as a result of new information, future events
or otherwise, except as required by law. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof.
[1] Source: Australian Securities and Investments Commission equity market
data. Based on average daily value traded 2021 YTD through February
[2] Based on lit market volume 2021 YTD through February
[3] Source: Chi-X Asia Pacific
[4] World Federation of Exchanges, as of year-end 2019
SOURCE: Cboe Global Markets, Inc.
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