Chicago Mercantile Exchange operator CME Group Inc. signed an agreement to acquire Nymex Holdings Inc.

The combined company will provide global market participants access to the leading financial and agricultural exchange and the leading energy and metals exchange.

Nymex customers will benefit from a single point of contact from trade matching through clearing, the two exchanges say.

CME Group will continue to offer multiple venues for execution, including trading floors in Chicago and New York, clearing on the Nymex ClearPort platform, as well as electronic trading on CME Globex, which is available to customers worldwide virtually 24 hours each trading day.

The combined company will continue to operate a trading floor in New York City as long as both revenue and profitability thresholds are achieved going forward.

“This strategic combination with Nymex, the premier exchange in energy and metals derivatives trading, continues both of our companies’ traditions of finding innovative ways to create value for our customers and shareholders,” said CME group executive chairman Terry Duffy, in a release. “This agreement builds on our existing trading technology agreement announced in April 2006 that has allowed customers around the world to benefit from access to Nymex’s benchmark energy and metals products.”

Under the terms of the definitive agreement announced today shareholders of Nymex will receive total consideration equal to 0.1323 shares of CME Group Class A common stock and US$36 in cash for each share of Nymex common stock outstanding, or an aggregate of approximately 12.5 million shares of CME Group Class A common stock and cash of US$3.4 billion.

Nymex shareholders will hold approximately 18.6% of the combined company on a pro forma basis. Shareholders of Nymex can elect to receive either CME Group Class A common stock or cash for each share of Nymex common stock. The exact amount of the cash and stock consideration to be received by each Nymex shareholder will be determined by proration in the event that total cash elections are either greater than or less than the mandatory cash component of approximately US$3.4 billion. CME Group may choose to increase the cash amount if Nymex shareholders elect to receive more than US$3.4 billion in cash, under certain circumstances.

The strategic combination is expected to create substantial value for shareholders through the realization of approximately US$60 million in cost synergies and additional compelling growth opportunities. As part of the transaction, Nymex is required to offer to purchase the 816 outstanding Nymex Class A memberships for consideration not to exceed US$500 million in the aggregate, or approximately US$612,000 per membership. The closing of the transaction will be conditioned on, among other things, at least 75 percent of the memberships being repurchased.

“Both Nymex and CME Group have a proven track record of bringing new and innovative risk management products to the marketplace, and we are excited about the potential to create a viable, long-term trading environment for our combined products,” said Nymex president and CEO James Newsome.

Upon completion of the transaction, Duffy will remain executive chairman of CME Group and Craig Donohue will remain CEO. The Board of Directors of CME Group will add three directors from Nymex.