* Bats Europe gets exclusive access
* Firms confirm exclusive talks
* The merger would overtake LSE by market share
By Luke Jeffs
LONDON, Dec 23 (Reuters) - Bats Europe's bid for rival Chi-X Europe marks a period of consolidation among the new breed of trading venues, weakened by a fight over market share with traditional stock exchanges.
Chi-X Europe and U.S. exchange Bats Global Markets, which owns Bats Europe, said they have "entered exclusive negotiations regarding the sale of Chi-X Europe".
They did not provide any detail such as on price.
The deal would create one of the largest European share trading firms, with a combined market share of about 22 percent, which would put it on par with the London Stock Exchange which has about 23 percent across its various units.
While a raft of upstart trading platforms has rapidly won market share from incumbent stock exchanges since the European Union introduced MiFID laws to enhance competition in 2007, they have struggled to make money.
European equity trading levels have been lower than expected since the financial crisis and the largest brokerage firms have been saying for a year that the sector -- which offers lower fees and faster trading -- was set for a shake-out.
The LSE this year bought an alternative trading platform called Turquoise, while Nasdaq OMX closed its pan-European trading platform Neuro in April citing the "increasingly competitive nature" of the business.
The EU is planning an overhaul of the MiFID rules that could further unsettle an already rapidly changing sector and offer European stock exchanges a lifeline as the focus shifts towards stability after the financial crisis. (Editing by Dan Lalor)