CME completes acquisition of KCBT

CME completes acquisition of KCBT

CME Group last week announced the completion of its acquisition of the Kansas City Board of Trade (KCBT).

The acquisition combines CME's futures and options in soft red winter wheat with KCBT's platform in hard red winter wheat, the largest such trading platform in the world.

CME chair Terry Duffy said the integration of the two global wheat benchmarks offers new opportunities to commercial grain and wheat traders and others who can continue to rely on CME and KCBT to manage their wheat price risk.

CME offers its wheat products through the Chicago Board of Trade (CBOT).

CME chief executive officer Phupinder Gill said CME plans to work with customers to develop innovative new products for both wheat varieties that will expand the existing CBOT and KCBT wheat programs.

CME and KCBT announced an agreement for the acquisition in October and said the deal was for $126 million in cash (Feedstuffs, Oct. 22). The acquisition was cleared by the Federal Trade Commission last month (Feedstuffs, Nov. 19).

CME said it will continue operating the KCBT trading floor in Kansas City, Mo., for at least the next six months and will name a committee of KCBT market participants to provide advice about hard red winter wheat contract conditions and trading for at least the next three years.

CME, headquartered in Chicago, Ill., operates the Chicago Mercantile Exchange and CBOT, which it acquired for $11 billion five years ago, forming CME Group (Feedstuffs, July 16, 2007). It also operates the New York Mercantile Exchange, which it acquired for $9 billion four years ago (Feedstuffs, Sept. 1, 2008).

CME is the largest derivatives group in the world and offers trading in virtually every major asset class, including agricultural commodities, energy, metals, real estate, weather and a number of financial instruments.

In agriculture, it trades corn, soybeans, wheat, cattle, hogs, dairy products and soft commodities such as cocoa, cotton and sugar.

CME reported 2011 revenues of $3.3 billion.

Volume:84 Issue:51

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