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CME Looks to Expand Reach

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Just last year the Chicago Mercantile Exchange and Chicago Board of Trade joined forces to create the CME Group, the largest exchange of it’s kind in the world. On Monday—the CME Group is hoping for the go-ahead to grow again.

The CME Group wants to acquire NYMEX, the parent company of the New York Mercantile Exchange. And Monday, after months of back and forth over the deal, members and exchange shareholders are scheduled to vote. It’s expected to be close.

Michael Wong is an analyst at Morningstar. He says right now all these exchanges are in consolidation mode because a large part of their costs are fixed.

WONG: Whatever revenue you have on toped of your fixed cost base, largely falls to the bottom line. So if the Chicago Mercantile Exchange acquire the New York Mercantile Exchange, almost all of the revenue that it acquires from the New York Mercantile Exchange will fall directly to the bottom line.

If the merger wins approval, it’ll give the CME Group metals and energy contracts. The deal could close by the end of next week.

I’m Adriene Hill, Chicago Public Radio.

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