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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – BM&F Bovespa, Brazil’s main securities, commodities and futures exchange, announced on Thursday the merger of the company with CETIP (clearinghouse) to form B3. The new company will become the fifth largest capital and financial market in the world in terms of value with a net worth of US$13 billion, according to officials.

Brazil, Sao Paulo,Cetip CEO, Gilson Finkelsztain, and BM&F CEO, Edemir Pinto, announce merger,
Cetip CEO, Gilson Finkelsztain, and BM&F CEO, Edemir Pinto, announce merger, photo courtesy of BM&F.

“This historic combination is, above all, a commitment to Brazil. Strong reputation, investment in people, focus on innovation and market development will be kept in the DNA of the new company,” said current BM&F President, Edemir Pinto during the press conference to announced the merger.

The CEO is expected to remain in office until next month, when he will be succeeded by Cetip’s CEO, Gilson Finkelsztain.

“The new company will generate opportunities for synergy and increase the scope of performance of two companies that complement not only products and services, but also in ways of acting and excellence, becoming a company of global size and reference,” said Finkelsztain to reporters.

The merger was approved last week by Brazil’s anti-trust agency, Cade. The names of some products, such as Ibovespa, that are already consolidated in the market will be kept.

Local media reports the main effect of the merger for customers – banks, brokers and insurance companies – and investors, will be an estimated cost reduction of around thirty percent.

According to Pinto the new company should expand its operations in Latin America with minority interests, increasing business deals.

BM&F/BOVESPA is currently one of the largest exchanges in the world while CETIP, the largest depository of private fixed income securities in Latin America.

According to officials the new company, B3, will be headquartered in São Paulo and have offices in New York, London and Shanghai.

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