Statement of the Department of Justice Antitrust Division on Its Decision to Close Its Investigation of Chicago Mercantile Exchange Holdings Inc.’s Acquisition of CBOT Holdings Inc.

On June 11, the DOJ issued a statement after announcing the closing of the investigation of CBOT Holdings Inc. by Chicago Mercantile Exchange Holdings Inc. After an extensive investigation of both the Chicago Mercantile Exchange’s (“CME”) proposed acquisition of CBOT and the 2003 agreement under which CME provides clearing services to CBOT, the Antitrust Division determined that the evidence did not indicate that either the transaction or the clearing agreement is likely to reduce competition substantially. More specifically, the Division determined that although the two exchanges account for most financial futures (and in particular, interest rate futures) traded on exchanges in the United States: their products are not close substitutes and seldom compete head to head, but rather provide market participants with the means to mitigate different risks; and they are, absent the merger, unlikely to introduce new products that compete directly with the other’s entrenched products, in part due to the difficulty of overcoming an incumbent exchange’s liquidity advantage in an established futures contract.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com