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Cboe expands into Asia-Pacific with Chi-X buyout


The exchange is purchasing Chi-X from J.C. Flowers & Co with cash-on-hand and existing credit agreements

Cboe Global Markets is looking to break into the Asia-Pacific region with the acquisition of share trading platforms in Australia and Japan.

Chicago-based Cboe, which is well established in North America and Europe, said the buyout of Chi-X Asia Pacific, along with a recent takeover of U.S. and European block trader BIDS, would make it possible to offer a global service to big investors who want to buy and sell shares on a large scale.

The exchange is purchasing Chi-X, which generated $26 million in revenue last year, from investment firm J.C. Flowers & Co with cash-on-hand and existing credit agreements. The value of the deal, however, was not announced but is expected to close in the second or third quarter of this year.

With an 18.4 per cent market share, Chi-X is Australia’s second largest securities exchange after the Australia Stock Exchange (ASX).

With a single deal we get to enter the two remaining markets open to competition in the world and create a truly global exchange network, David Howson, President of Cboe Europe, told Reuters.

Competition in financial market data is heating up after the recent merger of London Stock Exchange (LSE) Group and Refinitiv, as well as the proposed merger of S&P and IHS Markit, which would make them the second and third largest players, respectively, behind Bloomberg.

Moreover, the ASX suffered a major outage last year that triggered a review by regulators and underscored the need for more competition in the market.

For us now, we are truly global, that was our stated aim of our corporate strategy, Howsen added. It’s a very solid place to be in our view.

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