The NYSE Group and Euronext, the Paris-based pan-European exchange, reached a definitive agreement to merge on Thursday night, paving the way for the first transatlantic stock and derivatives exchange. A combined NYSE Euronext - formed after what the two exchanges call 'a merger of equals' - will be worth more than $ 21bn, with combined listings of companies worth $ 27,000bn.
NYSE Euronext will also be the world's most liquid marketplace, with average daily trading volume of approximately $ 80bn to $ 100bn. The NYSE Group launched its $ 10.2bn cash and stock bid for Euronext last week.
It was a move seen by many observers as a victory for the NYSE in its battle with Nasdaq, the second largest US stock exchange, which has built a stake of more than 25 per cent in the London Stock Exchange.
German operator Deutsche Börse has also made a bid for Euronext, and the NYSE said that it was prepared for the possibility of a counter-bid.
The German exchange on Friday said that it, “continues to believe in the substance and value of a transaction with Euronext....Deutsche Börse will continue to work towards a combination of the two companies.”
The tie-up between the NYSE Group and Euronext is expected to trigger a further wave of consolidation in the rapidly converging stock and derivatives exchange sector.
Separately, Euronext is understood to have met on Thursday with representatives of Borsa Italiana and its bankers about terms under which the Milan-based exchange will be acquired and absorbed into its structure
NYSE Euronext will be a US holding company, the shares of which will be listed on the NYSE, trading in US dollars, and on Euronext Paris, trading in Euros.
Its US headquarters will be in New York, and its international headquarters in Paris and Amsterdam, with London as the centre for its derivatives business. Under the agreement, each NYSE share will be converted into one share of NYSE Euronext common stock.
Euronext shareholders will be offered the right to exchange each of their shares for 0.980 shares of NYSE Euronext stock and € 21.32 in cash and will be able to elect to receive all shares or all cash through a 'mix and match' procedure. Euronext will also pay its previously announced extraordinary distribution of € 3 per share.
John Thain, NYSE chief executive, will remain as chief executive of the combined group, with Jean François Théodore, chief executive of Euronext, serving as deputy chief executive of the combined group with responsibility for European operations.
Mr Théodore said on Thursday night: 'This partnership will allow the successful Euronext model to be extended further across the Eurozone and is the best way to create a competitive European capital market.'
Mr Thain said it could take six months to gain the appropriate regulatory approvals
By Anuj Gangahar in New York and Norma Cohen in London
© Financial Times
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