Exchange Merge Collapses

A proposed merger of two financial powerhouses fell through when the Chicago Board Options Exchange called off months-long talks with the neighboring Chicago Board of Trade.

The pairing had been proposed as a way for the two exchanges, which have been battling each other over trading rights, to retain their dominant positions in the face of increasing electronic competition.

Board of Trade chairman David Brennan said Friday he was “very disappointed” at the decision, disclosed by the options exchange Thursday in a letter to members.

Leaders of the options exchange told their members that they had determined the merger “is not feasible at this time.” They added that “it became clear that the two exchanges’ current strategies and business models were so different as to preclude a merger.”