Deutsche Boerse, NYSE in 'advanced' merger talks

9th February 2011, Comments 0 comments

Deutsche Boerse and NYSE Euronext said on Wednesday they are in "advanced discussions" to merge and create the world's largest stock exchange operator by revenues and profits.

"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.

Under the all-share deal being discussed by Deutsche Boerse 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.

The companies expect to achieve savings of 300 million euros ($410 million), mostly from economies of scale in information technology, clearing operations, market operations and corporate centre functions.

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.

NYSE Euronext's equities markets, which include the New York Stock Exchange, represent one third of world equities trading, the most liquidity of any global exchange group. Deutsche Boerse runs the Frankfurt stock exchange.

© 2011 AFP

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