US exchange Bats Global Markets has secured British regulatory backing for its $300 million purchase of rival Chi-X Europe to create the region's top share trading venue. Bats said on Thursday Britain's Competition Commission had approved the merger, leaving the partners free to ink the friendly deal and combine the European arm of Bats and Chi-X Europe before the end of the year.
"The combination of Bats Europe and Chi-X Europe creates an even more formidable competitor in pan-European securities trading," said Joe Ratterman, Chief Executive of Bats Global Markets. Chi-X and Bats Europe are among a new breed of cheaper, faster share trading systems that have emerged over the past four years to challenge the region's historic stock markets.
Bats Global Markets has seen trading at its European arm grow steadily since launch three years ago but it has lagged Chi-X Europe, the stellar performer among the new platforms. The merger of Chi-X Europe, which this month has 20.1 percent of European trades, and Bats Europe, which has 4.8 percent, would create the largest share-trading venue in Europe, with nearly one quarter of the European share trading market. The combination will force into second place the London Stock Exchange Group, which has 24.1 percent of European activity across its British and Italian exchanges and alternative system Turquoise, Thomson Reuters data shows.