CME-CBOT Deal Clears Antitrust Hurdle

In a significant success for Skadden client Chicago Mercantile Exchange Holdings Inc. (CME), the Antitrust Division of the U.S. Department of Justice announced it will not stand in the way of the proposed merger between the CME and CBOT Holdings Inc. (CBOT). "The evidence does not indicate that either the transaction or the clearing agreement is likely to reduce competition substantially," the Department of Justice said in a June 10 statement.

Antitrust and corporate attorneys at Skadden, Arps represented the CME on the transaction.

The two exchanges account for most financial futures traded in the United States. According to Competition Law360, in the first 10 months of 2006, CME traded $909 million in futures and CBOT, $557.6 million. Combined, they will control about 85 percent of the U.S. futures trading market. The $8 billion merger agreement was first entered into in October 2006. The combined company would have a market cap of more than $25 billion. The companies will seek approval for the deal at shareholder meetings currently scheduled for July 9.