NYSE + Euronext done deal

Discussion in 'Wall St. News' started by Copernicus, Jun 1, 2006.

  1. Maverick74



    Combination Will Create The First Global Exchange

    --Joint Press/Analyst Conference Scheduled in Paris, Friday, June 2, 2006--

    New York and Paris, June 1, 2006 —NYSE Group, Inc. (NYSE: NYX) and Euronext N.V. announced today that they have signed an agreement to combine the leading U.S. and pan-European securities trading exchanges in a merger of equals. This new group, to be named NYSE Euronext, will globally redefine the marketplace for trading cash and derivatives securities, producing significant benefits for shareholders, issuers and users.

    The strategic partnership creates the world’s largest and most liquid securities marketplace with a combined market capitalisation of around €15 billion / $20 billion. With global market leadership positions across cash equities, derivatives, market data and technology, NYSE Euronext will be the world’s most liquid marketplace, with average daily trading value of approximately €80 billion / $100 billion, and the world’s premier listing venue, with total market capitalisation of listed companies of €21,000 billion / $27 trillion.

    NYSE Euronext will be a U.S. holding company, the shares of which will be listed on the NYSE, trading in U.S. dollars, and on Euronext Paris, trading in Euros. Its U.S. headquarters will be located in New York, and its international headquarters in Paris and Amsterdam (which will be the centres of operations for its international activities), with London as the centre for its derivatives business.

    Under the terms of the agreement, each share of NYSE 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, subject to proration. Euronext will also pay its previously announced extraordinary distribution of €3 per share.

    Both parties believe the merger will create substantial value for all stakeholders through the realisation of pre-tax annual cost and revenue synergies estimated at €295 million / $375 million. Of this amount, approximately €195 million / $250 million result from the overall rationalisation of the combined group's IT systems and platforms. Based on Atos Euronext Market Solutions’ leading technology and the management team’s proven integration track record, over the next three years, NYSE Euronext’s three cash trading systems and three derivatives trading systems will be migrated to a single global cash and a single global derivatives platform. In addition, 10 data centres (six in the U.S. and four in Europe) will be reduced to four globally-linked data centres (two in the US, two in Europe), and four networks will be reduced to one. These technology savings are incremental to the previously announced technology savings expected from the NYSE/Archipelago transaction. Furthermore, NYSE Euronext’s market leadership position in cash equities, listings and derivatives creates opportunities to expand the combined revenue base by an estimated €80 million / $100 million over a three-year period. NYSE Euronext will leverage the world’s most recognized exchange brands to create new products with global reach, increase its share of international listings and materially strengthen its competitive position in the U.S. equity derivatives market, the largest such market in the world.

    NYSE Euronext will have a balanced management team and organization. The Chairman of NYSE Euronext’s single-tier Board of Directors will be Jan Michiel Hessels, Euronext’s current Supervisory Board Chairman, and Marshall N. Carter, NYSE’s current Chairman, will become Deputy Chairman. John A. Thain, NYSE’s current Chief Executive Officer will be Chief Executive Officer of NYSE Euronext and Jean-François Théodore, Euronext’s current Chief Executive Officer, will be Deputy CEO and Head of International Operations of the combined company. Messrs. Théodore and Thain will also join the Board of NYSE Euronext. The Board of Directors of the combined company will be initially comprised of 20 directors, 11 directors designated by NYSE and 9 directors by Euronext. The balanced governance structure will be incorporated in the NYSE Euronext by-laws. Changes to these provisions and certain key strategic decisions may only be taken by supermajority vote. The executive committee will be drawn equally from each of NYSE and Euronext.

    Each of NYSE Euronext’s markets will continue to be regulated in accordance with local requirements. Specifically, NYSE Euronext’s European markets will continue to be regulated by their existing regulators, and the SEC will continue to regulate the U.S. markets.

    The NYSE Euronext exchange offer for Euronext shares is expected to be launched within 6 months, following the satisfaction of certain conditions, including receipt of regulatory approvals and NYSE and Euronext shareholder approval. The parties are confident that the transaction raises no competition issues.

    Jan Michiel Hessels, Chairman of the Supervisory Board of Euronext said: “The Supervisory and Management Boards of Euronext have been through an extensive process of identifying the best consolidation opportunity for our shareholders, issuers, and users, and we strongly believe NYSE is the best partner. This merger of equals, based on a balanced governance structure, will deliver significant shareholder value from substantial, quantified and deliverable synergies, and will allow Euronext to play a full role in reshaping the global capital market.”

    Marshall N. Carter, Chairman, NYSE Group, said: “My colleagues on the NYSE Group Board of Directors and I are extremely pleased with the combination agreement announced today and extremely excited by the prospects of this transformational deal. This transaction will produce significant synergies and outstanding value and growth opportunities, and we look forward to working toward its completion.”

    Jean-François Théodore, CEO of Euronext, commented: “Combining NYSE’s global brand and leading cash marketplace with Euronext’s international, cross-border, and diversified product range, technology and integration skills is the winning global platform for growth. Moreover, 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.”

    John A. Thain, Chief Executive Officer, NYSE Group, added: “This is an important development in the history of the NYSE, Euronext and the global capital markets. A partnership with Euronext fulfills our shared vision of building a truly global marketplace with great breadth of product and geographic reach that will benefit all investors, issuers, and our shareholders and stakeholders.”

    Citigroup Corporate and Investment Banking is acting as financial advisor to NYSE Group.

    In the transaction with NYSE, ABN Amro and Morgan Stanley are acting as lead advisors of Euronext. BNP Paribas and UBS Limited are acting as co-lead.
  2. So many words. So little content.
  3. ovations


    When they say 12 hours, what does that mean. Does it mean that those NYSE stocks would start trading in Europe Open time. If it does, how does it affect the open trading strategy? How does it affect the result announcement? Please comment Thanks
  4. it's about time. welcome to the 21st century, NYSE.

    though, I admit, I dread the ramifications for national sovereignty over the next 50 years and beyond...
  5. This whole thing is working out better than expected in my mind. The ARCA merger brought to speed all the electronic trading that everyone has asked for...while still keeping a single place market for tape reading and "Specialist over-rides" to accomodate larger orders.

    With the Euronext deal it should help because we shouldn't have to pay all the other Exchange fees to play in the other markets. The 12 hour day is my brother's dream (at least half a dream come true, LOL).

    I'll be in Paris next week for the WPT poker finals and will hopefully check out the action for an article in the magazine...I'll post anything of interest.

  6. so is it a done deal or not? I just read that the pesky Deutsche Bourse was "continuing their pursuit" of Euronext.
  7. The deal is done now ... NYX's stock price should begin to climb.

    Does anyone know what the earnings should be for the newly combined company?
  8. watch the euroweenies block it in Brussels or perhaps turn around and acquire NASDAQ or some other knee-jerk thing.