American futures trading firm CME Group has agreed to acquire NEX Group, a UK-based business focused on electronic markets and post trade business, in a deal valued at around £3.9bn ($5.4bn).

Under the terms of the deal, shareholders of NEX will receive £5 in cash for each share held and 0.0444 shares of CME.

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CME Group expects the deal to generate annual cost synergies of $200m by the end of 2021. As part of the deal, NEX CEO Michael Spencer will join CME’s board.

“The combination of NEX and CME will be an industry-changing transaction.  Bringing together cash and futures products and OTC services will be unique, offering clients improved access to trading, greater financial efficiencies and highly valuable data sets,” Spencer noted.

The transaction is expected to be wrapped up in the second half of this year, subject to shareholder and regulatory approvals.

CME chairman and CEO Terry Duffy said: “As one organisation, we will be able to employ the complementary strengths of each company to serve a wider client base while diversifying our combined businesses across futures, cash and OTC products and post-trade services.”

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“Michael Spencer and his senior leadership team have built a world-class organisation that is at the center of capital markets. We are committed to maintaining the longstanding relationships NEX has with its clients, and exchange and clearing house partners.  Building on NEX’s deep roots in Europe and Asia and CME’s strong technology platform, we will transform our international profile and broaden our distribution network in spot and futures FX products as well as cash, repo and futures products in U.S. Treasuries.”