Deutsche Boerse and Bats both have their roots in stock trading. Stock exchanges in the U.S. and Europe have generally seen profits eroded by regulations that have spurred competition. Nasdaq OMX Group Inc., a stock market, was among the final bidders for both Hotspot FX and 360T, according to people familiar with the matter. Bloomberg LP, the parent of this news organization, also operates in stocks and currencies.

CME Group Inc. was also said to be in the running for 360T. The Chicago-based derivatives exchange handles about 10 percent of electronic currency trading, according to Aite Group LLC.

Deutsche Boerse and Bats have recently hired chief executive officers who want to aggressively diversify into currencies.

Under CEO Carsten Kengeter, Deutsche Boerse also took full control of index companies Stoxx AG and Indexium AG for 650 million Swiss francs ($680 million). The diversification into index businesses mirrors similar moves at London Stock Exchange Group Plc and Intercontinental Exchange Inc.

“He indicated at investor day that he wanted to be acquisitive, and he's following through,” Lenardos said. Kengeter took the job in June following a career at UBS Group AG and Goldman Sachs Group Inc.

The deal for 360T will be financed through a combination of debt and equity. The transaction is expected to immediately increase its earnings per share. Kengeter is “buying at peak multiples,” Lenardos said.

Currency Market Share

360T had average daily volume of $70 billion in 2014 and $62 billion the year before, according to an Aite Group report from May. Hotspot's average daily volume in last year's fourth quarter was $31.6 billion. ICAP Plc's currency market had average daily volume of $105.3 billion in the 12 months through June.

There's another currency market that might be available: FXCM Inc., the broker that nearly went under because of the Swiss franc's massively volatile day on Jan. 15, said in March that it's trying to sell its stake in FastMatch.

It remains to be seen how Deutsche Boerse will seek to grow 360T's market share. A few months after buying Hotspot, Bats CEO Chris Concannon said he was starting a price war in some trading pairs.

The currency market has been under scrutiny following nearly five years of turmoil as some of the biggest dealers paid $5.8 billion in fines from charges that they had rigged the market.

Buying and selling currencies commonly takes place between a bank and its customer through over-the-counter trading. The big dealers will quote different prices depending on their relationship with the customer. They will also tweak prices according to the credit quality or sophistication of the client seeking to trade.

Banks were again buffeted in January when the Swiss National Bank shocked global markets by abandoning its price cap on the franc. Some dealers sought to reduce their losses by trying to renege on transactions, a move that wasn't lost on market operators who saw it as an opportunity to grow market share.

–With assistance from Rainer Buergin in Berlin.

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