NYSE, Deutsche Boerse In Talks To Merge

The New York Stock Exchange, the historic icon of American capitalism, is in advanced talks to be acquired by the German exchange. If the deal gets done, the combined company would be the world's largest financial exchange.

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NPR's business news starts with a hot stock tip.

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INSKEEP: An icon of American finance, the New York Stock Exchange, may soon be under foreign ownership. The NYSE is in advanced merger talks with Germany's main stock market.

NPR's Jim Zarroli has more.

Jim ZARROLI: If the deal goes through, and that's not certain yet, it would create the largest financial exchange company in the world.

NYSE Euronext is the company that owns the New York Stock Exchange, as well as exchanges in Paris, Amsterdam and Brussels.

Yesterday, the company says it was in advanced talks to merge with Deutsche Boerse, which owns the Frankfurt Stock Exchange.

Charles Geisst is a Wall Street historian.

Dr. CHARLES GEISST (Wall Street Historian): The company should have a sizable presence, to say the least. It's combining the - probably, outside of London -the two major stock market presences in Europe, with, of course, the NYSE. It should, in fact, be a formidable trading presence.

ZARROLI: The deal is the latest in a string of cross-border mergers between different exchanges, handling a variety of financial products. Once, stock markets like NASDAQ and the New York Stock Exchange processed most of the stock trades that took place in the United States. But with technology, they've had to compete with new, alternative trading platforms that have eaten into their business.

To maintain their strength, they've increasingly joined forces with other markets. This latest deal underscores the diminished role that the New York Stock Exchange plays in global finance. Although the new company would have dual headquarters in New York and Europe, it would be controlled by Deutsche Boerse, which would own 60 percent of the shares of the company. The deal must be approved by regulators on both sides of the Atlantic.

European officials have expressed reservations about such mergers before. But with the traditional stock exchanges under threat from new competitors, regulators may have little choice but to let the deal go through.

Jim Zarroli, NPR News.

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NYSE May Be Bought By Germany's Deutsche Boerse

The company that operates the New York Stock Exchange could soon be acquired by a European company in a deal that could be announced as soon as next week.

NYSE Euronext, the company that owns the New York Stock Exchange and stock and derivatives markets throughout Europe, has confirmed it's in advanced talks with Deutsche Boerse, which owns the Frankfurt Stock Exchange. The deal would create the world's largest financial exchange, with headquarters in both Europe and the U.S.

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Deutsche Boerse would control 60 percent of the shares, which means the ownership of the iconic New York Stock Exchange would be in foreign hands for the first time.

The announcement came hours after news of a $2.9 billion merger between the London Stock Exchange and TMX Group Inc., parent company of the Toronto Stock Exchange.

NYSE Euronext's shares jumped 14 percent to close at $38.10 in New York.

The New York Stock Exchange is already the world's largest stock market. But its parent, the $9.9 billion NYSE Euronext, isn't even the largest exchange company in the U.S. That title belongs to the $20 billion CME Group Inc. CME runs the Chicago Mercantile Exchange, where wheat, corn and pork belly futures are traded, as well as a number of other exchanges.

"The real motivation here is really about competing with the CME Group," said Larry Tabb, founder and CEO of the Tabb Group.

Increased competition has made stock trading less profitable. So the answer is to get bigger, he said.

The deal has to be approved by regulators in both the United states and Europe who have expressed reservations about such a merger in the past.

"It's going to get interesting," Tabb said.

The NYSE Group, operator of the New York Stock Exchange, bought Euronext for $10.2 billion in 2007. The combined company handles stock and derivatives markets in Amsterdam, Brussels, Lisbon and Paris as well as the NYSE Liffe derivatives market.

Deutsche Boerse, whose predecessor was founded in 1585, operates the stock market in Europe's largest economy. It also runs Europe's largest derivative exchange, the Eurex.

Aite Group analyst Simmy Grewal said more mergers may be on the way. Shares in other exchanges jumped on the news. The Nasdaq OMX Group Inc., the IntercontinentalExchange and CBOE Holdings Inc. all gained more than 4 percent. CME Group rose 1 percent.

Deutsche Boerse AG chief executive Reto Francioni would become the new group's chairman, and NYSE's CEO Duncan Niederauer, based in New York, its CEO.

The new company's executive committee would be drawn equally from the current leadership of both companies.

For Deutsche Boerse, the deal would represent a breakthrough in its aim to strengthen its international profile. Deutsche Boerse had been in merger talks with NYSE Euronext three years ago, but no deal was reached.

In 2006, the company tried to buy Euronext NV in a bid to build a pan-European stock exchange, but it eventually gave up, clearing the way for NYSE to merge with Euronext, which then formed the world's first trans-Atlantic stock exchange.

In 2005, a Deutsche Boerse takeover bid for Britain's London Stock Exchange Group PLC did not succeed.

NPR's Jim Zarroli contributed to this report, which includes material from The Associated Press

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