German stock exchange operator Deutsche Boerse said it has agreed to buy the U.S.-based options exchange International Securities Exchange Holdings for $2.8 billion in cash.
The acquisition would make Deutsche Boerse a major player in the U.S. options trading business, since ISE is the largest options market in the U.S. for individual stocks, including stock-index options.
The Deutsche Boerse statement said International Securities shareholders would get $67.50 a share for their stock. That represents a nearly 48% premium over Friday's closing ISE price.
ISE is the second-largest options market behind the Chicago Board Options Exchange.
A call to New York-based ISE for comment was not immediately returned.
Deutsche Boerse said the deal would have to win a majority at an extraordinary ISE shareholders meeting, which it said would take place "as soon as possible," and would also require approval by the U.S. Securities and Exchange commission.
The purchase would be made through the derivatives exchange Eurex, which is jointly owned by Deutsche Boerse and the Swiss Stock Exchange SWX.
ISE would merge with a subsidiary of U.S. Exchange Holdings, which is in turn a subsidiary of Eurex Frankfurt.
With consolidation sweeping the industry, Deutsche Boerse has been on the lookout for possible partnerships after it lost out to the NYSE Group in a bid to acquire European exchange operator Euronext and had two offers for the London Stock Exchange rebuffed.
The LSE fought off several other bids, including one from the Nasdaq Stock Market, which is now its largest shareholder. The Chicago Mercantile Exchange is fighting rival Intercontinental Exchange for the Chicago Board of Trade in a move to create the world's largest futures exchange Derivatives -- which encompasses options and futures -- have been growing at a faster pace than traditional stock trading. To capture this growth, many exchanges have shifted their focus toward stock options and other financial instruments.