Intercontinental Exchange (ICE), established in 2000, will acquire the New York Stock Exchange (NYSE), founded in 1817, following the agreement of a US$8.2bn deal that will make the Atlanta-based energy, emissions and commodities exchange one of the most important derivatives markets operators globally.
The NYSE’s holding company NYSE Euronext, established by the 2007 merger of the NYSE with electronic stock exchange Euronext, agreed to an offer of $33.12 a share in cash and stock from ICE. The deal follows last year’s US$11.3bn hostile bid made jointly by ICE and Nasdaq OMX, the world’s largest exchange company, which would have broken up NYSE Euronext if successful, but which was abandoned when US competition regulators threatened to sue to block the planned deal.
Announcing the acceptance of his latest bid, ICE’s chief executive officer (CEO), Jeff Sprecher, said: “Markets have inherently changed in the face of the global financial crisis. While derivatives markets have become more global to a large degree, many cash and equity markets have become more regional as major European financial institutions turned their focus to capital efficiency and regulatory reform.
“Our transaction is responsive to the evolution of market infrastructure today and offers a range of growth opportunities, while enhancing competition in US and European markets and broadening our ability to address new markets and offer innovative products and services on a global platform.”
Reports suggest that Sprecher has had long-standing ambitions to own NYSE Liffe, the European derivatives exchange owned by NYSE Euronext. The deal will now make ICE the third largest operator of futures exchanges and a serious competitor with Deutsche Börse and CME Group, ICE’s long-time rival. ICE is also expected to retain the famous NYSE building on Wall Street, but to look to hive-off Euronext’s cash equities businesses, which include the stock exchanges of Paris, Amsterdam, Brussels and Lisbon.
Under the terms of the agreement, Sprecher will remain CEO of the enlarged company and Duncan Niederauer, CEO of NYSE Euronext, will be CEO of NYSE Group and president of the enlarged company.
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