NEW YORK (Reuters) - CME Group Inc (CME.N: Quote, Profile, Research), parent company of the world's largest derivatives exchange, said on Monday its board has authorized a $1.1 billion share buyback and a special dividend of $5 per share, in an effort analysts say is designed to ease its purchase of energy exchange NYMEX. The stock repurchase will take place over a period of 18 months, subject to market conditions. The dividend will be paid out after CME's acquisition of NYMEX's parent, NYMEX Holdings Inc (NMX.N: Quote, Profile, Research) closes, expected in the fourth quarter. The value of the NYMEX deal has fallen from $11 billion to about $9 billion since January as CME shares have dropped sharply this year. The deal calls for NYMEX shareholders to receive 0.1323 CME shares and $36 in cash for each NYMEX share. CME shares are down more than 35 percent so far this year, underperforming the KBW Capital Markets .KSX index, which includes exchanges and has fallen about 27 percent Diego Perfumo, an analyst with Equity Research Desk, said CME's shares had fallen more than those of other exchanges in part because of its higher price-earning ratio, which makes its stock more vulnerable to an industry slowdown. But he also said the stock was under pressure because of regulatory uncertainty. In February, the U.S. Department of Justice suggested re-examining the lucrative clearing business of futures exchanges, such as the CME. The fall in share price has led dissident NYMEX members and shareholders to threaten to scuttle the deal if CME does not sweeten its bid. "It's a way to make the NYMEX deal more attractive without having to explicitly raise its offer," said Edward Ditmire, an analyst with Fox-Pitt, Kelton. "The dividend is a reward for voting for the deal." A CME spokesman said the buyback and dividend were not related to the NYMEX deal. Continued... CME said it will incur up to $4 billion of debt to make the NYMEX purchase and buy back the stock, an amount Ditmire said the cash-rich exchange could easily afford. CME last year completed a $12 billion acquisition of the Chicago Board of Trade and is waiting for approval of the NYMEX deal from NYMEX members and shareholders and the U.S. Securities Exchange Commission. A shareholder vote could come as early as July. "With the completion of the merger with CBOT and the pending acquisition of NYMEX, our need to significantly build cash balances has changed," CME Chief Executive Craig Donohue said. CME shares were at $442.65, up more than 3 percent, in midmorning trading on the New York Stock Exchange, (Reporting by Phil Wahba, editing by John Wallace and Maureen Bavdek)