Nasdaq to buy Treasury trading service for $1.23B

Nasdaq snaps up electronic trading service for up to $1.23 billion in latest move to diversify

Associated Press

NEW YORK (AP) -- The operator of Nasdaq Stock Market has agreed to pay up to $1.23 billion to take over an electronic service for trading U.S Treasury notes and bonds as part of an expansion into other investment fields.

The acquisition announced Monday will require Nasdaq OMX Group Inc. to pay $750 million in cash and up to $484 million in stock to BGC Partners Inc. for a U.S. Treasury trading service called eSpeed.

Nasdaq has been trying to lessen its financial dependence on the stock market by adding other investment services. The New York company agreed to pay $390 million late last year for a part of Thomson Reuters Corp. that provides investor relations, public relations and webcasting services.

The latest acquisition will give Nasdaq an electronic platform for trading Treasury notes and bonds with maturities ranging from two years to 30 years. BGC said the operation generated just under $100 million in revenue last year. Nasdaq's revenue last year totaled $3.1 billion.

"We are building a diverse, customer-centric portfolio of corporate, trading, technology and information solutions," said Nasdaq OMX CEO Bob Greifeld.

The stock portion of the acquisition price will be paid out over a 15-year period, depending on how much money is made from eSpeed. Based on its current stock price, Nasdaq expects to issue about 1 million shares annually during the 15-year payout period.

The deal is expected to be completed in the middle of this year.

Nasdaq shares fell 29 cents to close at $32.01.

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