Chicago Mercantile Exchange Acquisition of New York Mercantile Exchange

Compass Lexecon was retained by both CME Group Inc. and NYMEX Holdings, Inc. in connection with CME’s $8 billion acquisition of NYMEX. The deal combined the two largest US-based futures exchanges. In addition to providing antitrust consulting services to the merger, Compass Lexecon was also retained to provide litigation support to NYMEX in the subsequent shareholders’ litigation. Bobby Willig, working with Hal Sider, Mark Israel and Tom Stemwedel in our Chicago office, was retained by Ben Crisman and John Lyons of Skadden, Arps, Slate, Meagher & Flom LLP to assist CME in the merger review process. Rick Flyer, supported by Erica Benton and a team in Chicago, was retained by John Scribner and Steve Newborn of Weil, Gotshal & Manges LLP on behalf of NYMEX to conduct pre-merger antitrust evaluations of potential buyers and to assist in the merger review process. Daniel R. Fischel, working with Vince Warther and a third team in Chicago, was retained by Greg Danilow of Weil, Gotshal & Manges LLP on behalf of NYMEX to analyze shareholder allegations that NYMEX should have negotiated a price “collar” to protect shareholders against a decline in CME’s stock price, and that the fairness opinions were stale. Compass Lexecon analyzed the economics of price collars, management’s incentives to negotiate a collar, and the updating of fairness opinions. The shareholder litigation ended when plaintiffs voluntarily dismissed their claims.