The Chicago Mercantile Exchange is in talks with its New York rival Nymex about an $11 billion deal to create one of the world’s largest derivatives exchanges.

Under the terms of the proposed deal, CME Group, the Chicago Mercantile Exchange’s parent company, would acquire Nymex by offering its shareholders $36 in cash and 0.1323 CME shares for each Nymex share.

The offer values Nymex shares at roughly $119.22 each, roughly an 11 per cent premium on its closing price on Friday.

In a joint statement issued following mounting speculation of an imminent announcement the companies said they have agreed a 30-day exclusive negotiating period.

“Discussions are in early stages,” said the statement. “There can be no assurances that any agreement will be reached or that a transaction will be completed.”

If successful, the deal would create a futures industry colossus, dominating the global market for contracts in gold, oil and a range of other commodities.

CME Group, formed by the merger last year of the CME and the Chicago Board of Trade (CBOT), is already the largest exchange in the world, offering a range of futures and options contracts based on interest rates, equity indexes, foreign exchange, agricultural commodities, and even weather and real estate.

The New York Mercantile Exchange, which began life in 1872 as the Butter and Cheese Exchange of New York, is currently the world's largest physical commodities exchange, offering futures and options trading in energy and metals contracts and clearing services for more than 350 off-exchange energy contracts.

Both the Chicago and New York exchanges feature a combination of open outcry floor trading and electronic trading.

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