Merger Talks between Nasdaq OMX and ICE?


Sunday, February 20th, 2011
News

The reports that have surfaced regarding a possible merger between the Nasdaq OMX Group and IntercontinentalExchange Inc. (ICE) now indicate that the deal is less likely to go through, but that a mutual bid for the NYSE Euronext is still possible.

The possible sticking point for the deal is the fact that this would open ICE to being subject to regulations imposed by the Securities Exchange Commission. This is an obvious disincentive for ICE to participate in the bid. If the Nasdaq and ICE decide to go through with it, they would need to come up with about $11 billion to purchase the NYSE Euronext from Deutsche Börse. This past Friday NYSE Euronext rose by 2.2 percent to $37.79, making the market value of the company $9.86 billion.

Other antitrust concerns make the deal less likely, as the Nasdaq would not be prevented from taking on the NYSE’s stock listings. Sources say the pair may file a lawsuit challenging the allegedly excessive $340 million break up fee that was included in the Deutsche Börse-NYSE Euronext merger.

In the next five to seven days, Nasdaq and ICE will make a determination whether the acquisition will go through. Under the terms released from the discussions between the exchanges, Nasdaq is expected to take over NYSE Euronext’s cash equities, including the Big Board. Indications from analysts have stated that if the deal to wrest NYSE Euronext from Deutsche Börse does not go through, the Nasdaq would be left vulnerable.

The apparent spike in interest in stock exchange mergers has largely been to do with concerns over the changing nature of modern finance. Traditional stock exchange companies are increasingly vying for size, scale, and most importantly, access to international markets. The companies actions are catalyzed by the recent swell of start up exchanges on the internet, as well as the high demand for international trading capabilities.

Sources:

http://www.foxbusiness.com/markets/2011/02/20/nasdaq-ice-talks-cool-joint-bid-table/

http://dealbook.nytimes.com/2011/02/18/nasdaq-and-ice-hold-talks-over-potential-n-y-s-e-bid/?src=dlbksb

http://online.wsj.com/article/APfd6d75e7d66543319addde019346d5f1.html

 



Article by Andrew Timm

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: deutsch boerse , ice , merger , mutual bid , nasdaq , nyse euronext

Related Articles
Exchange Merger: OMX and IntercontinentalExchange (ICE) Make Hostile Bid for NYSE Euronext
Ventas Acquiring Nationwide in $7.4 Billion Merger
Deutsche Boerse-NYSE Merger to be Incorporated in Netherlands
CME Group Making Bid for NYSE?
Deutsche Boerse, NYSE Merger Hits Snags
Deutsch Boerse and NYSE Stock Exchange Merger Talks
Nasdaq Trade to Continue in Spite of Hacking
Sanofi Expected to Make Offer to Genzyme This Week
Boeing (NYSE:BA) Leads Dow Higher
NYSE Euronext (NYSE:NYX) CEO Looking to Derivatives for Revenue Growth

Comments:

Chris (September 17, 2012 10:24 PM)
Now i clearly undrstood what is FDI? thanks,,, nice informative site.....
m galivan (February 22, 2011 12:09 PM)
It is amazing that futures exchanges are reluctant to have any association with the SEC. With the way financial instruments are strongly linked across the world,how is it that we have different regulating bodies for different exchanges. There is no cohesiveness. Why should futures exchanges have the luxury of being regulated by a more lax governing body. Options and futures should be under the same regulator. The mere fact that commodity exchanges want nothing to do with the SEC should raise a red flag to this government. Somebody must be doing some pretty serious lobbying to keep things status quo. Its time to stop treating these exchanges like the old egg and butter exchange and get with modern times. Maybe NYSE woudnt have to merge with the Germans if they enjoyed the same privleges that the CME,ICE,and others opperate under.
Give Your Opinion
What are the different types of product liability insurance?
Share a simple answer to help inform others:
Specific to any country?
First name / Alias

• Your answer will be posted here:
What are the different types of product liability insurance?
Financial Questions & Answers
Ask A Question
Get opinions on what you want to know:
Specific to any country?