The acquisition will provide Cboe with a single point of entry into Australia and Japan and bring block trading capabilities to the APAC region.
Cboe (Cboe Global Markets) has entered into an agreement to acquire Chi-X Asia Pacific from private equity firm JC Flowers.
Headquartered in Hong Kong, Chi-X Asia Pacific is the holding entity for:
- Chi-X Japan, which operates four alternative equity trading venues with a 2.7 percent lit market share
- Chi-X Australia, the second largest regulated exchange in Australia with an 18.4 percent total market share
- Chi-X Global Technology Philippines, the technology arm which supports core operations in Japan and Australia
The acquisition will provide Cboe with a single point of entry into Australia and Japan capital markets, and help the market operator expand its global equities business across Asia Pacific.
Cboe’s subsidiaries already include the largest options exchange (Chicago Board Options Exchange) and the third largest stock exchange operator (BATS Global Markets) in the US. It also operates one of the largest stock exchanges by value traded in Europe, and owns EuroCCP, a leading pan-European equities clearing house.
Cboe chairman, president and CEO, Ed Tilly, said the acquisition of ChiX Asia Pacific would complement Cboe’s North American and European operations and provide a foothold in the key Asia Pacific region.
“In a short number of years, the Chi-X Asia Pacific team has built their business into one of the largest market operators in Asia Pacific,” Tilly said. “We look forward to working with them to accelerate the company’s further growth, building on our shared cultures of innovation and customer-first approach as we aim to bring greater choice to investors in Asia Pacific.”
With the acquisition, Cboe plans to leverage Chi-X Asia Pacific’s expansive presence in Asia Pacific and bring to the region block trading capabilities from the BIDS Alternative Trading System.
“With BIDS’ current network covering major North American and European equities markets, the addition of Asia Pacific equities is expected to create a global block trading platform to serve a broader base of customers,” Cboe said.
Cboe is also looking to expand its global market data offering and access to its proprietary products.
The terms of the transaction were not disclosed, though it is expected to close in the second or third quarter of 2021, subject to regulatory review and other “customary closing conditions”.
Cboe says it plans to fund the transaction with cash on hand, supplemented by existing credit agreements, if needed.
Chi-X Asia Pacific generated approximately USD 26 million in net revenue for the twelve months ended 31 December 2020, reflecting a 26 percent growth rate compared to the prior year, with non-transactional revenue comprising 67 percent of the overall net revenue.