Following acquisition, both firms will integrate their operations to create the second-largest US stock exchange and the new enterprise is expected to account for approximately 21% of the nearly 6.5 billion shares traded daily on exchanges.
Pending receipt of regulatory approvals, the transaction is likely to conclude during the first half of 2014, although its financial terms have not been divulged.
Current Direct Edge CEO William O’Brien will assume the post of president, while Bryan Harkins of Direct Edge will join the united firm as an integral member of the senior executive team.
Mr. O’Brien commented, "Together, the best of both organizations will work to further improve how the world trades, consumes market data, and accesses capital markets."
Headquartered in the Kansas City, the integrated exchange will leverage BATS technology and will operate from additional offices in Jersey City, New Jersey, New York and London.
Under the contract, all four US equity exchanges operated by BATS and Direct Edge, including the BATS BZX and BYX Exchanges and the Direct Edge EDGX and EDGA Exchanges, will continue in operation.
Broadhaven Capital Partners offered advice to BATS, while Direct Edge was advised by BofA Merrill Lynch and Evercore Partners, over the deal.
