BM&FBovespa to Buy Clearing House Cetip After Two Failed Bids

  • Bourse to pay 30.75 reais/share plus BM&FBovespa stock
  • Cetip shareholders would have about 12% stake in exchange

BM&FBovespa SA, the operator of Latin America’s biggest securities exchange, will buy Brazilian clearing house Cetip SA to strengthen its presence in the region.

The Sao Paulo-based bourse agreed to pay 30.75 reais per share of Cetip plus 0.8991 BM&FBovespa stock, according to a regulatory filing Friday. Both boards approved the offer, which will give Cetip shareholders a stake of about 12 percent in the exchange operator. Shareholders and regulators still need to approve the deal, according to the filing.

Cetip’s takeover will extend BM&FBovespa’s dominance over financial markets in Brazil at a time when the nation’s trading volume declines and economists forecast the worst recession in a century, prompting companies to look for diversification. Last month, Cetip had rejected a second takeover bid from BM&FBovespa, but said it authorized its financial advisers to start discussing a merger.

BM&FBovespa has said it wants to play a role in the financial integration of Latin America, and it has already purchased stakes in Bolsa Mexicana de Valores SAB and in Chile’s Bolsa de Comercio de Santiago. The company has also held talks with the Colombian exchange, according to remarks by the president of that bourse last year.

Before it's here, it's on the Bloomberg Terminal.