Cboe stock exchange expands into Asia to broaden market data

Cboe Global Markets Inc said on Thursday it was expanding into Asia by acquiring share trading platforms in Australia and Japan to broaden its footprint in the increasingly competitive sector of financial market data.

Cboe said the acquisition of Chi-X Asia Pacific Holdings, combined with a recent takeover of U.S. and European block trader BIDS, would make it possible to offer a global service to big investors who want to buy and sell large chunks of shares.

Chicago-based Cboe, long established in North America and Europe, is buying Chi-X Asia Pacific, which had net revenue of $26 million in the year to December, from investment firm J.C. Flowers & Co with cash in hand and existing credit agreements, if need be. The value of the deal was not disclosed.

Chi-X is Australia’s second biggest securities exchange with an 18.4% market share, behind only ASX, while the Japan unit is the third largest platform in the country with a 2.7% market share.

Last year, ASX had a major outage that underscored the need for more competition in the market and triggered a review by the regulators.

Cboe expects to close the deal in the second or third quarter of 2021, subject to regulatory approval.

“With a single deal we get to enter the two remaining markets open to competition in the world and create a truly global exchange network,” Cboe Europe president David Howson said. Elsewhere in Asia, share trading is dominated by the incumbent national exchange.

Howson, who will become Cboe president for Europe and Asia Pacific, said the deal would broaden its data footprint beyond North American and Europe, enabling it to create more products for global customers.

Competition in financial market data is hotting up after the recent merger of London Stock Exchange Group and Refinitiv, and the planned merger of S&P and IHS Markit, cementing them as the second and third largest players respectively behind Bloomberg LP.

“For us now, we are truly global, that was our stated aim of our corporate strategy. It’s a very solid place to be in our view,” Howson said.