Financial terms will not be disclosed for the transaction, under which Chi-X Europe and BATS Europe will combine to form BATS Chi-X Europe. The acquisition, expected to close in the second quarter of 2011, requires certain regulatory approvals.

In the fourth quarter of 2010, Chi-X Europe accounted for E368 billion traded as it became the second largest European equity exchange in 2010. BATS Europe reached E140.3 billion traded in the fourth quarter, about 6.4 percent of pan-European securities.

BATS Global Markets and Chi-X Europe entered into exclusive negotiations on December 22, 2010.

Broadhaven Capital Partners, through Beech Hill Securities, acted as financial adviser to BATS Global Markets with legal advice furnished by Davis Polk & Wardwell and Macfarlanes. For Chi-X Europe, Lexicon Partners acted as financial adviser with Slaughter and May as well as Alston & Bird serving as legal advisers.

Joe Ratterman, president and CEO of BATS Global Markets, said: “This transaction joins two successful and innovative market centers and will be a tremendous boost for competition in pan-European trading in the face of increasing consolidation among incumbent exchanges.

“BATS was drawn to Chi-X Europe because of our many similarities, particularly in the areas of culture, technology, market structure and innovation."

Alasdair Haynes, CEO of Chi-X Europe, said: “I am very proud of what Chi-X Europe has achieved since its launch in 2007 and am confident that the combined entity will ensure that competition among exchanges will be strengthened. Both Chi-X Europe and BATS believe strongly in the pan-Europe model and we will continue to work tirelessly to reduce trading costs for our users.”

Will the acquisition benefit BATS?

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