July 10 (Bloomberg) -- The Chicago Mercantile Exchange's $11.3 billion acquisition of the Chicago Board of Trade may be a prelude to takeover bids for the nation's remaining derivatives exchanges.

Board of Trade shareholders approved the merger with the Chicago Merc yesterday, creating the world's largest futures exchange. The combined company will dwarf the Atlanta-based Intercontinental Exchange Inc., the losing bidder for the Board of Trade, and the New York Mercantile Exchange, making them potential targets for NYSE Euronext.

Intercontinental ``may end up being more of a target now,'' said Will Vicars, managing director at Sydney-based hedge fund Caledonia Investments Ltd., the CBOT's largest shareholder. NYSE Euronext's ``modus operandi to date has been acquisitions, and I think that will probably continue.''

Exchanges worldwide are combining as electronic trading expands markets and allows single institutions to trade stocks, futures and options in several countries. Global futures and options trading increased 11 percent in the first two months of the year, with U.S. derivatives jumping 22 percent, compared with the same period in 2006, according to the Futures Industry Association.

Nymex, where benchmark U.S. crude oil and natural gas futures trade, has a market value of $11.8 billion. The exchange is exploring a sale to NYSE Euronext and others, two people with knowledge of the discussions said last month. Intercontinental, also known as ICE, offers contracts in Brent crude oil and has an $11 billion market value.

Dominant Exchange

The combination of the Chicago Merc and Board of Trade, to be known as CME Group Inc., will dominate U.S. trading for futures on everything from the Standard & Poor's 500 Index to Treasury bonds to corn, clearing about 89 percent of all contracts.

The CME Group will surpass Eurex AG and Euronext NV, Europe's top two bourses for trading derivatives, contracts whose value is derived from underlying assets such as stocks, bonds, currencies or commodities. The Chicago exchanges traded 388 million contracts in the first two months of 2007, surpassing Eurex by more than 120 million, according to the Futures Industry Association, a trade group.

Intercontinental's stock has risen 45 percent this year, including a 19 percent gain since March 14, the day before it announced its bid for the Board of Trade. Nymex shares have advanced 3 percent this year.

Potential Bids

Some of the rise in Intercontinental stemmed from the ``expectation that ICE would not succeed in its bid attempt and would itself become a takeover target,'' Niamh Alexander, an analyst at CIBC World Markets in New York said last month in a note to clients.

Intercontinental may respond to the loss by making a bid for the Nymex, Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York, said yesterday in an interview. ICE needs to increase its volume to survive and may best be able to accomplish that through an acquisition, he said.

``I assume they're going to go after Nymex, that would be the logical play,'' Hintz said.

Nymex spokeswoman Anu Ahluwalia declined to comment. ICE spokeswoman Kelly Loeffler and NYSE Euronext spokesman Richard Adamonis didn't return calls left after regular business hours.

NYSE Group Inc., which owns the New York Stock Exchange and the stock markets for France, Belgium, the Netherlands and Portugal, bought Euronext in April for $14.6 billion. Frankfurt- based Deutsche Boerse AG agreed to buy New York-based International Securities Exchange for $2.8 billion. In January, Intercontinental bought the New York Board of Trade for $1.8 billion.

``Derivatives are still where every new bid is coming from,'' Caledonia's Vicars said. ``It has the greatest growth.''

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net.

Last Updated: July 10, 2007 00:16 EDT