RENEE MONTAGNE, host:
Shareholders of the Chicago Board of Trade meet today to vote on a proposed merger with former cross-town rival the Chicago Mercantile Exchange. On Friday, the Merc increased its bid for the board of trade to more than $11 billion.
NPR's David Shaper reports.
DAVID SHAPER: Friday marked the third time the Mercantile Exchange had to up the ante since first proposing to merge with the board of trade for $8 billion last October. The Merc had to fend off an unsolicited bid from Atlanta-based Intercontinental Exchange, or ICE, which kept upping its offers, too.
And until the Merc sweetened the pot that last time, many key shareholders were set to vote against the merger, including Australia-based Caledonia Investments, CBOT's largest shareholder, which earlier last week urged fellow shareholders to reject the deal because the Merc's last offer was too low. With more money on the table, Caledonia and other shareholders reversed course. And the shareholders are now expected to approve the $11 billion bid.
Why such a merger mania amongst the financial markets? It's not to trade corn and hog futures, or even company stocks; it's to better compete in global derivatives. The trading of these futures and options contracts have increased on average 30 percent a year since 2001.
David Shaper, NPR News, Chicago. Transcript provided by NPR, Copyright NPR.
