Nasdaq to buy electronic Treasuries-trading platform eSpeed

PanARMENIAN.Net - Nasdaq OMX Group Inc agreed to buy electronic Treasuries-trading platform eSpeed from BGC Partners Inc for $750 million in cash, providing the exchange operator an entry into one of the world's largest and most liquid cash markets, Reuters reported.

The deal gives Nasdaq more exposure to fixed income markets, fitting into the company's strategy of expanding in asset classes beyond stock trading, where volumes have been depressed for years.

More than $500 billion in U.S. Treasuries change hands daily.

The acquisition helps to diversify Nasdaq's U.S. offerings, said Christopher Allen, an analyst at Evercore Partners.

"You always want some asset class diversification which Nasdaq really doesn't have in the U.S., where they just have cash, equity and equity options," he said.

Nasdaq plans to offer customers increased access to fixed income products and a greater variety of trading instruments as a result of the acquisition, Chief Executive Robert Greifeld said on a call with analysts.

The total consideration for the deal is up to $1.23 billion, including an earnout provision that could pay out up to $484 million in Nasdaq OMX common stock over 15 years, BGC said.

Greifeld and Howard W. Lutnick, chairman and CEO of BGC Partners, have been in informal talks about a possible deal for the past few years, according to two sources familiar with the situation, who declined to be identified because they are not allowed to speak to the media.

But these people said the conversations heated up late last year after IntercontinentalExchange Inc announced it was buying Nasdaq rival NYSE Euronext for $8.2 billion.

Nasdaq said last month it planned to create a market for trading shares of unlisted companies in a joint venture with trading platform SharesPost Inc. And it announced in December it was buying Thomson Reuters Corp's investor relations, public relations and multimedia services units for $390 million.