The CBOE has acquired Bats Global Markets in a $3.2 billion deal, Bloomberg reports.
Bats controls about a quarter of ETFs’ total trading volume in the U.S., which provides CBOE a significant foothold in the ETF business.
“This combination gives more power not only to listing of ETFs, but also to the trading of ETFs,” Bats CEO Chris Concannon said Monday following the CBOE deal announcement. “The scale we will achieve as a combined company allows us to be that much more aggressive.”
Bats is one of three exchanges that provide coverage for the $2.4 trillion U.S.-listed ETF market, competing against the dominant NYSE Arca exchange, which lists ETFs worth $2.23 trillion, and Nasdaq Inc.
Bats has aggressively expanded into ETF trading with fast trading technology as regulatory and technology changes diminished profits in other areas. CBOE, on the other hand, mainly trades options linked to the funds. With the Bats acquisition, CBOE is passing over its trading software for Bats’ technology.