Cboe offloads local exchange to Canadian giant

Cboe will sell its Australian and Canadian stock exchanges to TMX Group, an operator of major exchanges including the Toronto Stock Exchange (TSX), for US$300 million ($419m).

Cboe Global Markets, the parent company of Cboe Australia, announced its intentions to sell the business in October last year. It had said this will sharpen strategic focus on emerging growth opportunities despite sound performance.

ASIC said the deal is subject to its regulatory approval and it will expedite assessment of the application.

"Should the purchase go ahead, ASIC expects an orderly transition to new ownership with continuity of fair, orderly and transparent market operations," it said.

Cboe said it will work closely with customers, regulators, and other key stakeholders in both jurisdictions to support a smooth and orderly transition. It will also provide transition services support for a limited time.

The acquisitions of Cboe Australia and Cboe Canada are expected to close separately, each after required approvals have been obtained. Until the transactions close, Cboe will continue to operate both exchanges as usual.

Cboe Global Markets chief executive Craig Donohue said the sale will enable Cboe to reallocate resources and capital towards optimising core businesses as well as pursuing opportunities in new and emerging areas.

"We are pleased to reach an agreement to sell these businesses to TMX Group, a longstanding and well-established market operator," Donohue said.

"The transaction will bring Cboe Australia and Cboe Canada under new ownership well suited to support their next chapter."

Cboe Australia currently has around 20% of Australia's equity market turnover, representing approximately $2 billion of trades each day. Last year ASIC approved Cboe Australia's listing application, hoping to build healthy competition in the local listing market.

"This transaction marks an important milestone in our strategic realignment, allowing us to sharpen our focus on the growth opportunities that will position Cboe for long-term success," Cboe Global Markets head of enterprise strategy and corporate development Prashant Bhatia said.

"As our industry undergoes rapid transformation we see significant opportunity to build on our strengths and accelerate growth by focusing on areas where we can lead and differentiate."

Cboe said it will update the market regarding potential financial implications of the transaction in its first quarter earnings call on May 1.