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CME and CBOT to Merge, Creating $25 Billion Premier Global Derivatives Exchange

Chicago Mercantile Exchange Holdings Inc. and CBoT Holdings, Inc. today announced they have signed a definitive agreement to merge the two organizations to create what they describe as the most extensive and diverse global derivatives exchange

October 20, 2006

CME and CBOT to Merge, Creating $25 Billion Premier Global Derivatives Exchange

Chicago Mercantile Exchange Holdings Inc. and CBoT Holdings, Inc. today announced they have signed a definitive agreement to merge the two organizations to create what they describe as the most extensive and diverse global derivatives exchange. 

The combined company, to be named CME Group Inc., a CME/Chicago Board of Trade Company, is expected to transform global derivatives markets, creating operational and cost efficiencies for customers and exchange members, while delivering significant benefits to shareholders, a joint press release states.  Corporate headquarters of the combined organization will remain in Chicago.

CME Holdings became the first publicly traded U.S. financial exchange on Dec. 6, 2002. The company was added to the S&P 500® Index on August 10, 2006, and the Russell 1000® Index on July 1, 2003. It is the parent company of Chicago Mercantile Exchange Inc.  the largest and most diverse financial exchange in the world. As an international marketplace, CME brings together buyers and sellers on its CME Globex electronic trading platform and on its trading floors.

CME offers futures and options on futures primarily in interest rates, equities, foreign exchange, commodities, energy and alternative investments.

As one of the leading global derivatives exchanges, CBoT provides a diverse mix of financial, equity and commodity futures and options-on-futures products.

It has been a busy year for the 158 year old exchange: on April 26, 2006, the CBOT announced that it would increase global access to its benchmark Agricultural products by offering trading of CBoT full-sized, physically delivered Agricultural futures contracts on its electronic trading platform during daytime trading hours from August 1, 2006.

On September 25, 2006, Singapore Exchange and Chicago Board of Trade (CBOT®) commenced the first day of trade for the Joint Asian Derivatives Exchange (JADE).

Earlier this month its new futures contract based on the Dow Jones-AIG Commodity Index was launched. The DJ-AIG ER contract was developed under a license agreement among the CBOT, Dow Jones Indexes and AIG Financial Products Corp. (AIGFP).  It replaces the existing CBOT DJ-AIG contract, which will be delisted following its December 2006 expiration. The DJ-AIG ER will settle to the value of the DJ-AIGCI, rather than to the sum of its individual components, reflecting the deep liquidity of the global markets that comprise the index. 

The new DJ-AIG ER futures contract will trade exclusively on the Exchange’s premier electronic trading platform, e-cbot®, from 8:15 a.m. – 1:30 p.m. CT, Monday through Friday.  The CBoT is also creating a market maker program for the new DJ-AIG ER futures contract, ensuring the availability of a two-sided market for participants.

Commodities in the DJ-AIGCI include:  Aluminum, Copper, Coffee, Corn, Cotton, Crude Oil, Gold, Heating Oil, Lean Hogs, Live Cattle, Natural Gas, Nickel, Silver, Soybeans, Soybean Oil, Sugar, Unleaded Gasoline (RBOB), Wheat and Zinc.

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