All of the concerned parties are keeping very quiet about the proposed merger of NYSE Euronext and Deutsche Börse.
At the beginning of October, the European Commission dispatched a 130-page document by its competition body to NYSE Euronext and the Deutsche Börse. It is a so-called “statement of objections” – a somewhat unfortunate title, say NYSE Euronext sources – but one that is perfectly normal in these circumstances and from which no pejorative implications may be drawn. This concludes Phase II of the EU’s investigation into the merger. The DB and NYSE Euronext have several weeks to reply and answer the objections raised by the EU. An ultimate decision on whether the merger does, in fact, constitutes a de facto monopoly is still expected by the end of the year.
The European Union gives the opportunity for the DB and NYSE Euronext to produce a European champion, up against the might of the CME behemoth in the US, which has a 98 per cent market share of the US-listed futures market. It would combine the DB’s Eurex futures exchange with the NYSE Liffe’s US futures platform, creating the only mega-exchange capable of taking on the CME, which was formed in the previous decade out of the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade.
It seems quite likely that the merger will be passed and the deal might well close before year end. Nonetheless, the DB and NYSE Euronext will have to respond to the objections in the EC document. The details are a closely guarded secret, but it seems there are major points on which the EC will demand concessions so that it can at least appear to be listening to those who have demanded greater competition in the listed futures market.
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