Final merger plans between the New York and Frankfurt stock exchange operators are now on the table. But market consolidation across the globe is likely to make regulators wary of a monopoly.
The new company would be the world's largest exchange group
New York's stock exchange operator NYSE Euronext plans to merge with its German counterpart Deutsche Börse in Frankfurt to create the world's largest exchange group, company officials announced on Tuesday.
The merger, highly anticipated since both companies announced their plans last week, has been approved by the boards of both exchange owners and awaits the approval of stockholders and regulators.
The new company would split ownership 60-40 between Deutsche Börse and NYSE Euronext shareholders, respectively. Its headquarters would be in New York and Frankfurt with its holding company in the Netherlands.
Leadership would also be split, with the German side taking 10 of the 17 seats on the board of directors. Deutsche Börse CEO Reto Francioni would become chairman while his New York counterpart Duncan Niederauer would become new CEO.
Francioni would chair the new company's board
No new name has been announced, but the company is likely to become a powerhouse in global stock exchange. The combined annual trading volume surpasses $20 trillion (14.8 trillion euros) with operations in Germany, France, Britain, the Netherlands, Portugal, Belgium and the United States.
The merger follows similar announcements across the globe, with the London Stock Exchange announcing it would take over Toronto's TMX Group last week, and Singapore Exchange bidding for Australia's ASX late last year.
Concerns of increased consolidation have been growing among regulators, and the merger deal is likely to face some tough questions from authorities on both sides of the Atlantic.
But the two firms said joining forces will create "the premier global venue for capital raising" that would benefit from "the most efficient, transparent and well-regulated markets for issuers and clients around the world."
Author: Andrew Bowen (AP, Reuters, dpa)
Editor: Martin Kuebler