01 April 2011

GlobeNewswire: NASDAQ Group and IntercontinentalExchange seek to acquire NYSE Euronext

NASDAQ OMX (NDAQ) and IntercontinentalExchange (ICE) announced that they have made a joint proposal to acquire NYSE Euronext (NYX) for approximately $11.3 billion. The proposal, delivered in a letter to the Board of Directors of NYSE Euronext, represents a 19 per cent premium over the price proposed by Deutsche Börse, and a 27 percent premium over NYSE Euronext's unaffected stock price on February 8, 2011, the day prior to NYSE Euronext's statement that they were in discussions with Deutsche Börse regarding a transaction.

As part of the proposal, ICE would purchase NYSE Euronext's derivatives businesses, and NASDAQ OMX would retain NYSE Euronext's remaining businesses, including the NYSE Euronext stock exchanges in New York, Paris, Brussels, Amsterdam and Lisbon, as well as the US options business. A combination of NASDAQ OMX and NYSE Euronext would merge the trading, listings, options and market technology businesses of the two companies to create a leading international exchange, headquartered in New York City, with a geographic footprint in sixteen countries and best-in-class technology expertise that is used in over 60 markets internationally. ICE and NASDAQ OMX will continue to operate as separate businesses throughout the proposed transaction, as well as after its completion.

Robert Greifeld, Chief Executive Officer of NASDAQ OMX, said: "Our industry is undergoing a period of historic change. During the last five years more than 90 per cent of the top 100 global listings chose not to list in the US, depriving US investors of the opportunity to easily invest and trade in these companies. The combination of the two leading US exchanges delivers an opportunity to build a global exchange platform that has the scale and growth potential to benefit investors, issuers and other market participants. We believe it would increase transparency and liquidity in US markets and create jobs as new companies raise capital. For Europe, it strengthens the equity markets by creating a new, truly pan-European equity trading platform and solidifies Paris and London as premier financial hubs. Given that our proposal is clearly a superior proposal, we hope that NYSE Euronext's Board will recognise this opportunity as well as the benefits for NYSE Euronext's employees and customers." 

Jeffrey C. Sprecher, Chairman and Chief Executive Officer of ICE, said: "Given the dynamics in derivatives markets today, the pace of innovation and the need for competition, we are well positioned to bring more value to stockholders by ensuring that Liffe participates in the growth opportunities in our space. In addition to expanding our clearing capabilities to interest rates, we would enable increased competition in the US, where interest rates futures are dominated by one exchange with approximately 95 percent market share. And, in Europe, we would offer an attractive solution to preventing that same business from being dominated by a single competitor, while preserving global innovation around additional risk management services." 

Strategic Benefits

A combined NASDAQ OMX and NYSE Euronext would have leadership positions across all major business lines, including a world-class cash trading business in US and European equities and a preeminent US options business. Together, NASDAQ OMX and NYSE Euronext would strengthen the international competitive position of the US at a time when companies and investors are increasingly being drawn to other financial centres.

A unified US equities market would ensure that the US is better able to compete globally in a rapidly changing international market for equity trading and capital-raising. A unified technology platform would also lower firms' and investors' trading costs and provide increased liquidity and transparency, while maintaining continued US regulatory oversight of the capital markets to protect investors. 

ICE's acquisition would create a strong global competitor in listed derivatives markets and central counterparty clearing.

Steps to Completion

NASDAQ OMX and ICE believe that the proposed combination would satisfy the required regulatory approvals in all jurisdictions. NASDAQ OMX and ICE believe that they can secure EU competition clearance in contrast to the expectation of a deep and extended probe for the proposed Deutsche Börse transaction.

The NASDAQ OMX/ICE proposal requires approval from the majority of NASDAQ OMX and ICE stockholders, versus the requirement of a 75% acceptance level of the exchange offer by Deutsche Börse's shareholders. Both proposals will require approval of a majority of NYSE Euronext stockholders.

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