An investor group led by Chongqing Casin Enterprise Group (Casin Group) is set to acquire the Chicago Stock Exchange (CHX) after reaching an agreement, as announced on Casin's website Friday, Feb. 5, the Xinhua News Agency reported.
According to the announcement, the transaction was unanimously approved by the Board of Directors of CHX, although it still needs to get regulatory approvals, and the final acquisition is expected to close in the second half of 2016.
The terms of the transaction were not disclosed.
John Kerin, president of CHX, said that the acquisition came "after an in-depth review of strategic alternatives for the exchange" as they consider it as the best outcome for the clients, shareholders and the trading community as a whole.
The report said that the Chinese company assured that it will preserve the current business operations and proprietary trading platforms of CHX. The management team will remain in place upon the closure of the transaction, the company said.
Based in Chongqing, Casin Group is a leading diversified holding company in China that has investments in financial services, real estate and environmental services.
CHX is considered as the first U.S. stock exchange to be purchased by a Chinese company. The 134-year-old stock exchange currently handles about 0.5 percent of U.S. stock trading.
A report by Reuters quoted Kerin as saying that under new ownership, CHX would have the funding for efforts like revamping its listings program.
"They like our strategy, and they want us to continue to execute on it," Kerin told Reuters.
The report said that CHX plans to seek approval to list U.S. companies that want to access the capital markets but may not meet the standards of NASDAQ or Intercontinental Exchange Inc.'s (ICE.N) New York Stock Exchange.
Kerin said that Casin Group's long-term objective is to list Chinese companies in the United States. The Chinese company is also planning to start an equities exchange in Chongqing in Southwest China using CHX's model and technology, he added.
CHX plans to introduce on-demand auctions for large blocks of stock, called CHX Snap auctions, by the end of March and eventually triple its daily volume, the CEO said.
"Together, we have a unique opportunity to help develop financial markets in China over the longer term and to bring exciting Chinese growth companies to U.S. investors," Casin Group Chairman Shengju Lu said in a statement.