CME Exec Expects To Complete Merger with CBOT by Mid-Year

Craig Donohue, chief executive officer of the Chicago Mercantile Exchange, told CNBC’s “Squawk Box” that he doesn't think his company will need to "make any concessions" to complete its planned merger with the Chicago Board of Trade by the middle of the year.

“We have a definitive merger agreement with the Chicago Board of Trade,” he said Friday. “The Board of Trade’s directors continues to recommend our merger to the shareholders of CBOT.”

The Chicago Mercantile Exchange had offered about $8 billion for the crosstown CBOT. However, last week, IntercontinentalExchange, an electronic futures market known as ICE, challenged that offer with an unsolicited bid valued at about $9.9 billion.

The CBOT postponed indefinitely its shareholder vote on the CME bid while its board considers ICE's offer.

CBOT directors have a “fiduciary duty” to examine the competing offer, which he dismissed as “inferior,” Donohue said. He said the proposed CME-CBOT combination is “far superior strategically, financially and operationally to the ICE proposal.”

“I think (CBOT) will agree with us that it’s an inferior proposal,” Donohue said. “But that’s a process they have to go through and that’s to be respected.”

He said he believed ICE has “overplayed” possible regulatory problems.

“We’ve been extremely well-advised by antitrust counsel and leading economists,” Donohue said. “(ICE has) said they have first-hand knowledge of what the (U.S.) Department of Justice will do in this case. I think that really destroys their credibility -- I don’t understand how they would have any kind of special information. We’ve been working with the Department of Justice and we expect to close our transaction by the middle part of this year.”