(Reuters) – BATS Global Markets Inc and Direct Edge Holdings said on Monday they would merge in a deal that would create the second-largest U.S. stock exchange.
Financial terms of the transaction were not announced. It is expected to close in the first half of 2014, subject to regulatory approvals.
Joe Ratterman, chief executive officer of Lenexa, Kansas-based BATS, will be the CEO of the combined company, and Bill O’Brien, CEO of Jersey City, New Jersey-based Direct Edge will be president.
BATS operates two U.S. stock exchanges, as does Direct Edge. The new company will continue to operate all four exchanges, which will run on BATS’ technology.
BATS also runs a U.S. equity options market, as well as BATS Chi-X Europe, which is the largest pan-European equities exchange by market share and value traded.
The new company, which will be headquartered in the Kansas City area, will surpass Nasdaq OMX Group as the No. 2 U.S. equities exchange by volume traded, sitting behind NYSE Euronext.