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CBOE Will Acquire BATS Global Markets for $3.2 Billion

September 26, 2016

Chicago Board Options ExchangeChicago Board Options Exchange
The Chicago Board Options Exchange in Chicago, IllinoisPhotograph by Tim Boyle—Bloomberg via Getty Images

CBOE (CBOE) said it would buy BATS Global Markets (BATS) for about $3.2 billion, just over five months after BATS made its market debut, as the largest U.S. options exchange operator looks to diversify its business.

CBOE’s cash-and-stock offer values BATS—the No. 2 stock exchange operator in the United States by volumes—at about $32.50 per share, a premium of 2.2% to its closing price on Friday.

CBOE owns the Chicago Board Options Exchange and has an exclusive licensing deal on the S&P 500 index options contract through 2032. The exchange also has rights to the popular VIX volatility index.

BATS merged with Direct Edge in 2014 to become the second-largest U.S. stock exchange operator.


The Kansas City, Missouri-based company also owns the largest pan-European stock exchange, a foreign exchange-trading platform, as well as two options exchanges that would give CBOE a more competitive market position in the United States.

CBOE Chief Executive Edward Tilly will lead the combined company, CBOE said on Monday.

The transaction is expected to close in the first half of 2017.

BATS shares were little changed in premarket trading on Monday, while those of CBOE were down less than a percent.

BofA Merrill Lynch and Broadhaven Capital Partners LLC are financial advisers to CBOE Holdings. Sidley Austin LLP is CBOE’s legal counsel.

Barclays Capital and UBS Investment Bank are financial advisers to BATS, while Davis Polk & Wardwell LLP is its legal counsel.