Exchange group Bats Global Markets has completed the $300 million (190 million pound) takeover of rival Chi-X Europe and pledged to merge the trading venues in the first half of next year to create a viable alternative to the region's dominant stock markets.
Bats, which runs Bats Europe, won regulatory clearance to push ahead with the deal a week ago, paving the way for Thursday's announcement which has been welcomed by traders who want to ensure competition among Europe's top trading platforms.
The completion of this deal joins two pioneering companies and together we will continue to be at the forefront of competition and innovation in Europe's securities markets, said Joe Ratterman, Chief Executive of BATS Global Markets.
Bats Global Markets, which has bought Chi-X partly to boost its European franchise ahead of an initial public offering, said it expected to complete the technology migration, which involves Chi-X moving to Bats' technology, in the second quarter of 2012.
Chi-X and Bats, which together have about a quarter of European share trading on their systems, are among the most successful of a new breed of trading venues that has emerged in the past four years.
These platforms have challenged the region's top exchanges, including the London Stock Exchange
Europe's top share trading banks have welcomed the merger because they see the formation of a strong, commercially viable rival to the exchanges, which should ensure fees are kept to a minimum.
The merger of Chi-X Europe, the top pan-European market with 20.1 percent, and Bats Europe, which has 4.8 percent, would create the largest share-trading venue in Europe, narrowly beating the LSE.
(Editing by Helen Massy-Beresford)