Deutsche Börse in merger talks with NYSE
The Local · 9 Feb 2011, 19:09
Published: 09 Feb 2011 18:26 GMT+01:00
Updated: 09 Feb 2011 19:09 GMT+01:00
"This transaction creates a group that is both a world leader in derivatives and risk management and the premier global venue for capital raising," the firms said in a joint statement.
"The global capital markets would benefit from the creation of the most efficient, transparent and well-regulated markets for issuers and clients around the world."
The announcement came hot on the heels of the London and Toronto stock exchanges unveiling a landmark merger, creating one of the world's biggest trading platforms that will dominate the raw materials and energy sectors.
Shares in Deutsche Börse were suspended before the announcement while NYSE Euronext soared by close to 20 percent.
Deutsche Börse's market value is €11.3 billion ($15.5 billion) and NYSE Euronext $9.2 billion, based on Friday prices.
It is not the first time that the German firm, which operates the Frankfurt stock exchange, has attempted to go down the aisle with Euronext. Its earlier advances were spurned, however, and in 2007 Euronext merged with the NYSE.
Deutsche Boerse also tried and failed three times to buy the London Stock Exchange (LSE).
Under the all-share deal being discussed by Deutsche Börse and NYSE Euronext, the German firm's shareholders would hold 59-60 percent in the new company and those of NYSE Euronext 40-41 percent.
NYSE Euronext's equities markets, which include the New York, Paris, Brussels and Amsterdam stock exchanges, represent one third of world equities trading, the most liquidity of any global exchange group.
The combined group would offer clients "global scale, product innovation, operational and capital efficiencies, and an enhanced range of technology and market information solutions," the statement said.
The companies expect to achieve savings of €300 million ($410 million).
In addition, they hope to generate "substantial" extra revenues from clearing services, product innovation and cross-selling opportunities between their global cash and derivatives businesses.
The combined group would have dual headquarters in New York and Frankfurt. Chairman would be Reto Francioni, based in Frankfurt, and chief executive Duncan Niederauer in New York.
They cautioned that they could give no assurances that any agreement would be reached nor that if an agreement was reached, that a transaction would be completed.
Markus Huber, analyst at ETX Capital, cautioned that the deal could fall foul of competition watchdogs given the scale involved.