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Deutsche Börse-NYSE merger heads for rocks

The Local · 15 Jan 2012, 09:39

Published: 15 Jan 2012 09:39 GMT+01:00

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With European anti-trust services setting conditions deemed unacceptable by executives, there is a growing chance that the tie-up putting the New York

Stock Exchange under the same roof as the German market operator will fall apart.

A senior executive of NYSE Euronext – which also operates markets in Paris, Amsterdam, Brussels and Lisbon – said it would not make additional concessions to secure approval by the European Commission.

"We won't go any further because that threatens the business logic of the deal," NYSE Euronext deputy chief executive Dominique Cerutti told the French business daily La Tribune on Friday.

NYSE chief executive Duncan Niederauer had already acknowledged that it appeared the European Commission was set to reject the plans come a February 9 deadline for its decision, almost one year after the deal was first announced.

But he said they had received no formal notification.

In a video message to employees, Niederauer said of the anticipated rejection: "If that's true, I would have to say that's a pretty disappointing conclusion."

A person familiar with the EU review told AFP earlier in the week that the proposed merger as it stands was unacceptable.

EU competition authorities opened a probe into the deal in August over concerns that the merged company would control 90 percent of the European derivatives market.

In November the companies proposed separating some of their derivatives operations to allay EU concerns, but sources said the Commission was unsatisfied.

"It is not certain the Commission could accept" the merger in its current state, added the source.

The Commission wanted NYSE and Deutsche Börse to sell off some of their derivatives businesses to allay competition concerns, which Cerutti said was a

position "based on erroneous data."

The proposed merger has also sparked controversy in the United States because it would hand over the New York Stock Exchange to foreign owners.

Story continues below…

The merger would see Deutsche Börse shareholders own 60 percent of the new combined, Netherlands-incorporated firm.

The US Justice Department said in December that Deutsche Börse would have to sell its 31.5 percent stake in Direct Edge Holdings, the fourth-largest exchange operator in the United States.


The Local (news@thelocal.de)

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Your comments about this article

17:30 January 15, 2012 by nemo999
Do not really care who owns the NYSE, but what I am really concerned about is allowing the creation of another TOO BIG TO FAIL institution, and who or what government is going to be asked to bail out if and when the institution management drives into it into the abyss via their highy risk incentivized compensation packages.

Why is it in our (the people that end up paying for the cleanup) interest to allow this? I know why it is in the interest of the various company management (Money). What the hell another €14 billion on top of the hundreds of billions already promised is nothing.
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