The UK’s Competition and Markets Authority (CMA) has initiated a probe into Nasdaq’s proposed $190m acquisition of Cinnober Financial Technology, a Swedish fintech company.
Image: Nasdaq’s acquisition of Cinnober to be probed by the Competition and Markets Authority. Photo: courtesy of Tony Hisgett from Birmingham, UK/Wikipedia.org.
In this connection, the competition watchdog has announced a phase 1 investigation into the proposed acquisition of Cinnober by Nasdaq’s subsidiary Nasdaq Technology.
The CMA, which is taking up the investigation to check if the deal would impact competition in the UK or is in violation of any competition laws, has called for comments from relevant parties. The invitation to comment on the deal closes 7 December 2018.
In a statement, the competition watchdog, said: “The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Nasdaq had entered into the deal to acquire the Swedish fintech firm in September. Cinnober, whose solutions are primarily based on the TRADExpress platform, provides services to brokers, exchanges and clearinghouses.
Its portfolio of services includes price discovery and matching, real-time risk management, index calculation, clearing and settlement, data distribution and market surveillance.
Some of Cinnober’s customers are the Asia Pacific Exchange, Australian Securities Exchange, B3, Dubai Gold & Commodities Exchange, Euronext, the London Metal Exchange, LME Clear, Japan Exchange Group, Johannesburg Stock Exchange, New York Stock Exchange and the Stock Exchange of Thailand.
According to Nasdaq, the transaction is in line with its existing capital deployment priorities that include organic business investment, shareholder capital return, and leverage objectives.
The acquisition is expected to accelerate Nasdaq’s strategic direction as a technology and analytics provider to capital markets across the world.
Headquartered in New York City, Nasdaq claims to be the first electronic stock market in the world. It is engaged in providing trading, clearing, exchange technology, listing, information and public company services across the world.