NYSE, Deutsche Boerse Merge

The parent company of the New York Stock Exchange, NYSE Euronext, and Germany’s Deutsche Boerse have agreed to merge. The strategic $10 billion deal will create the world’s first formal global exchange for stocks and derivatives.

Announced before the US markets opened Tuesday morning, the merger ends several days of intense negotiations between the boards of the two exchanges.  The new single tier board will be comprised of 17 members, 10 of which will come from Deutsche Boerse, and 7 from NYSE Euronext.

Deutsche Boerse will swap 0.47 of its shares for one share of NYSE Euronext resulting in 60% ownership by Deutsche Boerse.  Merged, the company will have combined revenues of $5.4 Billion; effectively the largest exchange by revenues. The companies’ combined market capitalization is about $26 billion.

Duncan Niederauer (NYSE Euronext CEO) will be CEO, while Deutsche Boerse CEO Reto Francioni will become chairman.

A new Dutch holding company will be created and will have headquarters in both New York and Frankfurt. No statement was made about what the new company would be named.

Combined, Deutsche Boerse’s Eurex unit and NYSE Euronext’s London-based Liffe unit should dominate European exchange-based futures trading, with more than 90 percent overall, raising antitrust questions among market regulators.