Deutsche Boerse and NYSE Euronext initiate merger talks

NYSE - In Consolidation Mode

NYSE – In Consolidation Mode

The world’s two of the biggest exchanges; NYSE Euronext and Deutsche Boerse are in advanced talks for a possible merger.

If successful, the new entity will be the world’s biggest stock exchange by revenue and profits and will be headquartered in both Frankfurt and New York.

Bothe sides however issued warnings that the talks will actually lead into a deal. The clarification came on the same day when Canada’s TMX and the London Stock Exchange announced a merger.

A joint statement issued said that shareholders of Deutsche Boerse will own 59% -60% of the merged entity while NYSE shareholder will own the remaining. The combined entity will be able to add €300 million annually to the bottomline by cost saving and boosting revenue.

Ed Ditmire of Macquarie Securities said: “That’s as big as deals get. Clearly Deutsche Boerse would be the buyer. It would be a stretch to call it a merger of equals”.

The latest announcement comes amid a recent trend of stock market consolidation through cross-border M&A deals and will overshadow Wednesday’s deal between TMX of Toronto and LSE.

Analysts expect further consolidation in this space.

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