Deutsche Bourse and NYSE Euronext become world’s largest exchange operator
Deutsche Boerse and NYSE Euronext announced Tuesday the creation of the world's largest exchange operator. A key compromise is an agreement to headquarter the combined group in both New York and Frankfurt.
Deutsche Boerse shareholders will hold 60% of the stock and the remainder by NYSE investors. However there was no name given to the proposed group.
The new company will have a single tier board, with 10 seats out of 17 going to Deutsche Boerse but with NYSE Euronext taking the all-important chief executive post.
Under the terms of the deal NYSE Euronext stock will be exchanged for 0.47 shares in the new company, while Deutsche Boerse shares will be swapped on a one-for-one basis, the exchanges said in a statement.
As previously trailed, NYSE head Duncan Niederauer will be chief executive and Reto Francioni of Deutsche Boerse will take on the role of chairman.
The merger deal creates an unprecedented exchange powerhouse with more than 20 trillion US dollars in annual trading volume and operations in Germany, France, Britain, Amsterdam, Portugal, Belgium, and the United States.
The pair promised the takeover would cut combined costs by 400 million US dollars a year. The companies' combined market capitalization is about 26 billion USD.
Together, Deutsche Boerse's Eurex unit and NYSE Euronext's London-based Liffe unit would dominate European exchange-based futures trading, with more than 90% overall, raising antitrust questions among market regulators.
However the takeover game is not limited to New York and Frankfurt: Singapore Exchange bid for Australia's ASX late last year, and, last week, London Stock Exchange announced it would acquire Canada's TMX Group - hours before Deutsche Boerse and NYSE Euronext said they were in advanced talks.