8-KOther EventsExhibits & Filings

CME GROUP INC. 8-K Report, Corporate Update (Oct 17, 2006)

Filed October 17, 2006For Securities:CME

Summary

CME Group Inc. (CME) has announced a significant strategic move by entering into an Agreement and Plan of Merger to acquire CBOT Holdings, Inc. (CBOT). This transaction represents a major consolidation within the futures and options exchange industry, combining two prominent players. The acquisition is structured with a stock-and-cash component, offering CBOT shareholders the option to receive 0.3006 shares of CME Class A common stock or a cash equivalent per CBOT Class A common stock. Investors should note that the cash portion of the deal is capped at $3 billion and may be subject to proration, meaning the full cash election might not be available for all CBOT shareholders if the limit is exceeded.

Key Highlights

  • 1CME Group Inc. (CME) has entered into a merger agreement to acquire CBOT Holdings, Inc. (CBOT).
  • 2CBOT shareholders will receive 0.3006 shares of CME Class A common stock per CBOT Class A common stock, or a cash election.
  • 3The cash consideration is subject to an aggregate limit of $3 billion and may be prorated if exceeded.
  • 4The transaction is subject to affirmative votes from both CME and CBOT stockholders.
  • 5Regulatory approvals are required for the merger to proceed.
  • 6The expected closing date for the transaction is mid-year 2007.
  • 7The filing also indicates this report satisfies communications under Rule 425 of the Securities Act.

Frequently Asked Questions

The main event is the announcement of a merger agreement between CME Group Inc. (CME) and CBOT Holdings, Inc. (CBOT), whereby CME will acquire CBOT.

CBOT shareholders will have the option to receive 0.3006 shares of CME Class A common stock for each share of CBOT Class A common stock they own, or elect to receive an amount in cash equivalent to the value of that stock exchange ratio. The cash election is based on a ten-day average of CME's closing stock prices at the time of the merger.

Yes, the total aggregate cash payable to CBOT shareholders is limited to $3 billion. If the total cash elected by shareholders would exceed this limit, the cash amounts will be prorated.

The merger is contingent upon affirmative votes from both CME and CBOT stockholders, obtaining necessary regulatory approvals, and satisfying other customary closing conditions.