NYSE & German Exchange Merge
The New York Times reports:
NYSE Euronext and Deutsche Börse agreed on Tuesday to a $10 billion all-stock merger, combining two of the world’s biggest stock exchanges into a trans-Atlantic powerhouse.
The union of the operators of the New York Stock Exchange and the Frankfurt Stock Exchange is the biggest example of consolidation among exchanges, as established players contend with smaller electronic markets that have seized market share.
Last week, the London and Toronto stock exchanges announced their own merger. And in October, SGX, the operator of the Singapore stock exchange, said it planned to buy the Australian Stock Exchange.
By combining, Deutsche Börse and NYSE Euronext hope to create a giant among financial markets, allowing investors access to thousands of stock listings in the United States and Europe, as well as options, derivatives and other services. But the deal has stoked fears that New York and its iconic Big Board are ceding prominence as a major financial capital.
“This transaction brings together two of the most respected and successful exchange operators in the world to lead the way in global capital markets and set the standard for growth, quality and market reach,” Reto Francioni, Deutsche Börse’s chief executive, said in a statement.
Duncan Niederauer, NYSE Euronext’s chairman, added: “This transaction is a catalyst for the development of a global capital markets community, delivering the best, most transparent and innovative services for clients and issuers, wherever they are.”
NYSE Euronext and Deutsche Börse sealed the deal on Tuesday morning after votes by both boards.
Under the terms of the deal, Deutsche Börse will issue 0.47 of a share for each NYSE Euronext share, a roughly 10 percent premium to the American company’s stock price on Feb. 8, before the two announced their talks. The deal values NYSE Euronext at about $10 billion.
Mr. Francioni of Deutsche Börse will be chairman of the combined company, while Mr. Niederauer of NYSE Euronext will be chief executive.
Deutsche Börse will hold 10 seats on the 17-seat board of the combined company, because its shareholders own about 60 percent of the merged exchange operator’s shares. Yet American investors are likely to be the biggest shareholders in the combined company. At the end of 2010, United States institutions owned about half of each exchange operator; only a fraction was owned by German shareholders.
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