NYSE Update: Deutsche Boerse Deal Faces More Hurdles

by Trefis Team
-9.36%
Downside
45.29
Market
41.05
Trefis
NYX
NYSE Euronext
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The European regulators are looking to block the $9 billion merger Deutsche Boerse AG and NYSE Euronext (NYSE:NYX) unless the companies agree to offload some of their assets to make a more level playing field for competitors. The planned merger would create the world’s largest exchange for stocks and derivatives, and the new formed entity would control most of the Europe’s futures and option market which is a cause of concern for the European regulators.

The two companies tried to appease European regulators by offering to allow rivals to access the Eurex clearinghouse for transactions and selling their overlapping European options operations but the officials gave a cold response to the offer. The companies have insisted that they would drop the deal if forced to sell their Liffe and Eurex derivatives arms. A final decision from the regulators is expected in January next year. [1] Competitors such as Nasdaq OMX (NASDAQ:NDAQ) and Intercontinental Exchange have previously sought to break up the deal by buying NYSE Euronext.

See our full analysis of NYSE Euronext

We have a price estimate of $33.20 on NYSE Euronext’s stock, about 20% above the current market price.

The prospect of a forced asset sales has attracted interest from Nasdaq OMX which would be looking to acquire the U.K. futures market, Liffe, run by NYSE Euronext. [2] However, the businesses that NYSE Euronext and Deutsche Boerse have already offered to sell drew little interest from Nasdaq.

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Notes:
  1. Deutsche , NYSE battle to keep merger on track, Market Watch, Dec 7, 2011 []
  2. Nasdaq CEO: Interested If NYSE Forced To Sell UK Futures Arm, WSJ, Dec 7, 2011 []
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