The German stock exchange operator Deutsche Boerse and New York’s NYSE Euronext plan to merge to create the world’s largest stock exchange group, a German weekly reported on Monday.
The news of the formation of a new company, which would become the largest global firm for trading securities and derivatives at a time marked by unprecedented turmoil for all participants in financial markets, was published by Der Spiegel ahead of a meeting of the supervisory board of the German stock exchange group. NYSE Euronext operates the New York Stock Exchange – the largest stock exchange in the world by market capitalization of the companies listed on it – as well as exchanges in Paris, Amsterdam, Brussels, and Lisbon, and the derivatives platform Liffe.
Analysts estimate that the merger would result in cost savings that would protect the mammoth stock exchange operator from an expected decline in trading volume next year, positioning it better in the market for products such as the buying and selling of risk from a particular issuer for a certain premium. Deutsche Boerse and NYSE Euronext plan to establish a holding company in the Netherlands, which will then make an offer to acquire the shareholders of Deutsche Boerse.
Subsequently, the NYSE would merge with the American unit of that Dutch entity, further emphasizes Der Spiegel, citing an internal document presented by Deutsche Boerse CEO Reto Francioni to the company’s management. “We have no statement and generally do not comment on speculation,” states Deutsche Boerse in its statement, adding that the company continuously evaluates a range of options to increase its value. “This includes frequent contacts with almost every major market participant,” it adds in that statement. NYSE Euronext spokesperson Rick Adamonis also declined to comment on Der Spiegel’s report. (H)
