Nasdaq plans to fund the $1.1 billion acquisition with a combination of debt and available cash, according to a company statement. It expects the acquisition to close in the second half of 2016.
"The equities options business has been core to our long-term strategy, and we believe an essential component to the strength of the Nasdaq franchise," said Bob Greifeld, CEO of Nasdaq.
After the deal closes, Nasdaq will operate PrecISE Trade(r) an options trading execution and management system.
In a statement, Nasdaq said that it expected the deal to "realize a minimum of $40 million in annualized expense synergies."
"The merger of Nasdaq and ISE's innovative options franchises will result in a combination of talent and technology from both organizations," added Tom Wittman, Nasdaq executive vice president and global head of equities.