NYSE Says Appeal of EU Ruling on Merger With Deutsche Boerse Is an Option
By Nandini Sukumar – Feb 1, 2012 8:47 AM ET
NYSE Euronext (NYX) Chief Executive Officer Duncan Niederauer said the exchange operator is considering whether to appeal against European regulators’ veto of its merger with Deutsche Boerse AG. (DB1)
An “appeal is an option going forward,” Niederauer said in a phone interview today, while he’s in “no rush” to make a decision. Both exchanges said today that they will focus on standalone strategies and are negotiating to terminate the takeover deal.
The European Commission blocked Deutsche Boerse and NYSE Euronext’s plan to create the world’s biggest exchange today after concluding it would hurt competition. The deal would have led to a “near monopoly” in the region’s exchange-traded derivatives, the commission said.
NYSE Euronext won’t have to pay a break-up fee to terminate the merger, Niederauer said. The operator of the New York Stock Exchange will now consider options for growth, he said, declining to comment on whether it will bid for the London Metal Exchange or LCH.Clearnet Group Ltd. The company, which reports earnings next week, will also present “pretty detailed 2012 plans,” including how it will contain costs, he said.
The LME, founded 135 years ago, will consider bids on Feb. 23 that may lead to a takeover of the world’s biggest platform for trading metals. LCH.Clearnet, owner of the largest swaps clearinghouse, is holding exclusive talks with London Stock Exchange Group Plc (LSE) after previously drawing interest from NYSE Euronext.
“Neither of those deals would have the degree of difficulty” that Deutsche Boerse posed, Niederauer said today. The European veto “really sends a message to the whole industry. An industry that should consolidate has run into unanticipated resistance.”
Deutsche Boerse agreed to acquire its New York rival in a deal valued at $9.5 billion when it was announced last February. Since then, the value has plummeted to about $7.3 billion as Deutsche Boerse shares fell. The companies appealed directly to commission President Jose Manuel Barroso last month to try to salvage their merger, arguing that a ban would harm European exchanges and drive business to other parts of the world.
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