The Chicago Mercantile Exchange has agreed to buy the Chicago Board of Trade for $8 billion. This move will create a global derivatives exchange with average daily trading volume approaching 9 million contracts per day, representing approximately $4.2 trillion in value.

The combined company, to be named CME Group Inc., a C.M.E./Chicago Board of Trade Co., is expected to transform global derivatives markets, creating operational and cost efficiencies for customers and exchange members, while delivering significant benefits to shareholders. Corporate headquarters of the combined organization will remain in Chicago.

The combined company will provide customers efficient, global access to a wide array of benchmark exchange-traded derivatives based on U.S. interest rate yield curve, equity indexes, foreign exchange, agricultural and industrial commodities, energy and alternative investment products such as weather and real estate.

"The merger will not impact core trading rights or membership or clearing privileges at either exchange," the organizations say. "The cash portion will be financed through cash on hand and debt financing, if necessary."

The board of directors of the combined company initially will be comprised of 29 directors, 20 directors designated by the C.M.E. and 9 directors by the C.B.O.T.

The transaction is expected to close by mid-year 2007, pending approvals by regulators, and shareholders of both companies and C.B.O.T. members.