LONDON U.S. exchange Bats Global Markets has won the provisional backing of Britain's Competition Commission to complete its $300m takeover of rival Chi-X Europe and create the region's largest alternative trading firm.
The Commission, which has been studying the merger since June, said on Thursday it had provisionally cleared the deal, adding clients would be able to ensure the merged entity does not try to hike fees by taking their business elsewhere.
Bats Global Markets said in an emailed statement on Thursday the takeover will complete before the end of the year, assuming the Commission gives final approval in the coming weeks.
"We are pleased by the Competition Commission's provisional findings which, if reflected in the final report, will clear the way for the creation of an even stronger competitor to Europe's incumbent exchanges," Joe Ratterman, chairman and chief executive of Bats Global Markets, said in a separate statement.
The ruling, set to be confirmed by December 2, is a boost for Bats, which has seen its European unit overshadowed by Chi-X Europe, the largest European trading venue with 19.1 percent market share.
Bats Europe has 4.8 percent of European trading, Thomson Reuters data shows.
"Given no one argued that the Bats/Chi-X merger would hurt competition, there was no obvious reason why it wouldn't go ahead," said Richard Perrott, an analyst at Berenberg Bank.
The approval comes as Bats and Chi-X rivals Deutsche Boerse (DB1Gn.DE) and NYSE Euronext NYX.N step up their efforts to convince European anti-trust authorities in Brussels to back their mega-merger.
The $9 billion deal, which would create the world's largest stock exchange group, has raised concern among regulators and clients over the possibility of virtual monopolies in listed futures trading and clearing.
(Editing by David Hulmes)