Deutsche Borse-NYSE: Details of the Merger

Guten Tag!

It’s official. NYSE Euronext and Germany’s main stock exchange company, Deutsche Börse are merging.

Here are the key details of the merger and the combined company, which would be a mega powerhouse in equities trading and derivatives markets

Exchange ratio

Each NYSE Euronext share will be converted into 0.47 of a share of the new holding company, the companies said.

As the companies previously said, shareholders of Deutsche Börse will own 60% of the combined new company, while NYSE Euronext shareholders will own 40%


$5.4 billion combined revenue, based on 2010 figures

  • 37% of total revenue from derivatives trading and clearing
  • 29% of revenue from cash listings, trading and clearing
  • 20% in settlement & custody
  • 14% in market data, index & technology services

Dual Headquarters:


New York

A holding company will be created in the Netherlands, and it will be listed in Frankfurt, New York and Paris.


CEO: NYSE Euronext CEO Duncan Niederauer

Chairman: Deutsche Börse CEO Reto Francioni

15 board members excluding the chairman and CEO — 9 picked by Deutsche Börse and 6 by NYSE Euronext

“Cost Synergies”

A.k.a., cost cutting. The companies said they expected cost synergies of $400 million by the third year after the merger is completed. And, according to the companies, the combined company will wring out at least $133 million of annual revenue synergies.

“We feel that the merger is driven by a desire for cost savings, in what has been a revenue-constrained environment,” wrote CLSA analyst Rob Rutschow, who said the combined company would target about one-quarter of NYSE’s expense base.

The Name:

Don’t worry. The New York Stock Exchange name apparently will live on. The companies said in their statement: “Each of the group’s national exchanges, including those in Amsterdam, Brussels, and Lisbon, will keep its name in its local market and all exchanges will continue to operate under local regulatory frameworks and supervision.”

Amid angst and some political jingoism in the U.S. over the possibility of the iconic New York Stock Exchange losing its name to the Germans, NYSE and Deutsche Borse issued a joint statement over the weekend:

“As we have previously reported, we are in advanced merger negotiations to create a group that is both a world leader in derivatives and risk management and the premier global venue for capital raising. Those negotiations continue. Any suggestion that a name for the resulting proposed holding company has been finalized is false. No name has been finalized and we expect any decision on a name would be made at a later date, subject to the successful completion of a merger agreement.”

As the companies hinted over the weekend, they didn’t announce a name for the combined entity. Deal Journal previously said that the combined exchange may go with a banal name like “Global Exchange Inc.” to ward off nationalistic hand wringing.


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