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BATS to merge with Direct Edge
27 August 2013
Planned 2014 merger will create second-biggest US exchange
Exchange operators BATS Global Markets and Direct Edge Holdings have announced they are to merge.
While financial details of the deal have not been disclosed, the merger is expected to complete by early 2014, subject to regulatory approval.
Under the new corporate structure, BATS' chief executive officer Joe Ratterman will remain in position, while William O’Brien, CEO of Direct Edge becomes president. Direct Edge's chief operating officer Bryan Harkins will also serve on the senior executive team of the merged company.
Ratterman said “This agreement is an important milestone for the U.S. equities market and other markets around the globe as it will combine two organizations that have been innovative in creating a more competitive marketplace to benefit all investors.”
Using BATS' proprietary technology, the both firms said the four equity exchanges they operate - BATS BZX and BYX Exchanges and the Direct Edge EDGX and EDGA Exchanges – will remain open, while Direct Edge's plans to open an equity market in Brazil also remain in place.
The firm will be based in Kansas City, with offices in Jersey City, New York and London. The deal was advised by Broadhaven Capital Partners for BATS, while Direct Edge was advised by BofA Merrill Lynch and Evercore Partners.
Direct Edge's O’Brien said “Direct Edge and BATS were both founded on a commitment to create an optimal trading experience for a diverse member base, from retail investors to broker-dealers to institutions.
"Together, the best of both organizations will work to further improve how the world trades, consumes market data, and accesses capital markets.”