NYSE Euronext

NYSE Euronext, Inc.
Type Public
Traded as NYSENYX
EuronextNYX
Industry Financial services
Founded April 4, 2007
Headquarters New York City, New York, United States
Key people Jan-Michiel Hessels
(Chairman)
Marsh Carter
(Deputy Chairman)
Duncan Niederauer
(CEO)
Dominique Cerutti
(President and Deputy CEO)
Services Equity trading platforms, securities exchanges, derivatives, futures and options markets, market data
Revenue US $4.425 billion (2010)[1]
Operating income US $745 million (2010)[1]
Net income US $577 million (2010)[1]
Total assets US $13.30 billion (end 2010)[1]
Total equity US $6.844 billion (end 2010)[1]
Employees 2,970 (end 2010)[1]
Divisions New York Stock Exchange, Euronext (Amsterdam, Paris, Brussels), NYSE Arca, NYSE Liffe, NYSE Technologies
Website www.nyse.com/nyseeuronext

NYSE Euronext, Inc. (formerly NYSE Group, Inc. and Euronext N.V.) is a Euro-American for-profit corporation that operates multiple securities exchanges, most notably New York Stock Exchange (NYSE), Euronext and NYSE Arca (formerly known as ArcaEx).

Contents

Overview

NYSE completed its acquisition of Archipelago Holdings via a "double dummy" merger on March 7, 2006 in a US$10 billion deal to create the NYSE Group. The NYSE Group became a for-profit corporation and began trading publicly on its own stock exchange on March 8, 2006 under the NYX ticker. Owners of the 1,366 NYSE seats received 80,177 shares of NYSE Group stock plus US$300,000 in cash and US$70,571 in dividends for each seat. NYSE Group merged with Euronext on April 4, 2007 to form the first global equities exchange. NYSE Regulation subsequently merged with NASD to form FINRA on July 26, 2007 and is therefore no longer managed by the exchange.

Mergers

Euronext and NYSE Group

Due to apparent moves by NASDAQ to acquire the London Stock Exchange, NYSE Group bid €8 billion in cash and shares for Euronext on May 22, 2006, outbidding a rival offer for the European Stock exchange operator from Germany's Deutsche Börse, the German stock market.[2] Contrary to statements that it would not raise its bid, on May 23, 2006, Deutsche Börse unveiled a merger bid for Euronext, valuing the pan-European exchange at US$11 billion (€8.6bn), €600 million over NYSE Group's initial bid.[3] Despite this, NYSE Group and Euronext penned a merger agreement, subject to shareholder vote and regulatory approval. The initial regulatory response by the U.S. Securities and Exchange Commission chief Christopher Cox (who was coordinating heavily with European counterparts) was positive, with an expected approval by the end of 2007.[4] The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City, with European operations and its trading platform run out of Paris. NYSE CEO John Thain, who would head NYSE Euronext, intends to use the combination to form the world's first global stock market, with continuous trading of stocks and derivatives over a 21-hour time span. In addition, the two exchanges hoped to add Borsa Italiana (the Milan stock exchange) into the grouping. On June 23, 2007, the Borsa Italiana was however sold to the London Stock Exchange.[5]

Deutsche Börse dropped out of the bidding for Euronext on November 15, 2006, removing the last major hurdle for the NYSE Euronext transaction. A run-up of NYSE Group's stock price in late 2006 made the offering far more attractive to Euronext's shareholders.[6] On December 19, 2006, Euronext shareholders approved the transaction by a 98.2% margin. The remainder voted in favor of the Deutsche Börse offer. Jean-François Théodore, the Chief Executive Officer of Euronext, stated that they expected the transaction to close within three or four months.[7] Some of the regulatory agencies with jurisdiction over the merger had already given approval. NYSE Group shareholders gave their approval on December 20, 2006.[8] The NYSE consummated its US$11 billion takeover of Paris-based exchange operator Euronext NV at ceremonies in the U.S. and Europe on April 4, 2007.[9]

NYSE Euronext operates & holds stake in: the New York Stock Exchange (NYSE), Euronext, NYSE Liffe, NYSE Arca, NYSE Arca Europe, NYSE Alternext, NYSE Amex, NYSE Liffe US, LLC (NYSE Liffe US), NYSE Technologies, Inc (NYSE Technologies), EasyNext, BlueNext[10], Free Market (Marché Libre), SmartPool.[11]and NYSE BondMatch.

NYSE Euronext and Deutsche Börse

On 9 February, 2011, Bloomberg reported that the Deutsche Börse was in advanced talks to buy NYSE Euronext in a deal that would create the world's largest trading powerhouse.[12] The shares of both companies were temporarily frozen on the news due to the risk of large price movements and clarifications of the deal. A successful deal would see the new company becoming the world's largest stock exchange operator with a market capitalisation of listed companies equal to US$15 trillion.It would make it to where Americans would own 40% of the new company and Germans own 60% and the main office would be located in New York City.

President and deputy CEO of NYSE Euronext Dominique Cerutti would become the new company's president and head of commercial and internal technology. Roland Bellegarde, also of NYSE Euronext, would become the head of European cash equities. The new company have €300 million (US$410 million) in cost savings. However, the merger is subject to review in both the United States and with the European Union (EU) for concerns it could create a “de facto monopoly”.

Deutsche Börse had also considered an acquisition once in 2008 and again in 2009.[13] MarketWatch commentator David Weidner has called the forming of the Euro-American Stock Exchange “a blow to national pride” when the deal was announced.[14]

On April 1, 2011 NASDAQ and IntercontinentalExchange made a competing hostile bid valued at $11.3 billion with a cash and stock offering of $42.50 per share. This represents a 19% premium over the Deutsche Börse offer and a 27% premium over NYSE's value before that offer was made in February.[15]

The board of NYSE Euronext twice rejected the Nasdaq OMX-ICE proposal, saying the unsolicited deal would lead to too much debt and regulatory opposition. The bid was withdrawn in May.[16] NYSE Euronext shareholders were scheduled to vote on Deutsche Börse’s all-stock deal, which the board backs, on July 7, and Deutsche Börse shareholders would vote on the deal by July 13. [17]

In October, 2011, CEO Niederauer said the company had received the EU's so-called statement of objections, which is more than 100 pages long, and would be responding within two weeks, possibly by asking for the opportunity for an oral hearing with the regulators. The EU examination of the proposal formally began June 29 has said its expanded probe has a Dec. 13 deadline. In March, Joaquin Almunia, the EU's antitrust commissioner, expressed concern that the deal would maybe monopolize the derivatives market due to Deutsche Boerse's “vertical silo” which routes all trade clearing through its own services. Almunia said then he preferred a “more open business model” for markets.[18]

Formation of NYSE Technologies

NYSE Technologies is the commercial technology division of NYSE Euronext. NYSE Technologies was launched in January 2009, incorporating all the internal technology divisions of NYSE Euronext, NYSE Euronext’s Market Data division and a number of acquisitions including: The Securities Industry Automation Corporation (SIAC) in November 2006,[19] TransactTools in December 2006,[20] Wombat Financial Software in January 2008,[21] and Atos Euronext Market Solutions in August 2008.[22] In August 2009, NYSE Euronext announced that it was acquiring NYFIX - subject to NYFIX shareholder and regulatory approvals.[23]

NYSE Regulation and FINRA

On May 4, 2010, NYSE Euronext and the Financial Industry Regulatory Authority (FINRA) announced that FINRA would assume responsibility for performing the market surveillance and enforcement functions originally conducted by NYSE Regulation. The agreement was subject to review by the Securities and Exchange Commission and completed by end of June, 2010.[24]

Under the agreement announced, FINRA assumed regulatory functions for NYSE Euronext’s U.S. equities and options markets – the New York Stock Exchange, NYSE Arca and NYSE Amex. FINRA currently provides regulatory services to the NASDAQ Stock Market, NASDAQ Options Market, NASDAQ OMX Philadelphia, NASDAQ OMX Boston, The BATS Exchange and The International Securities Exchange.

NYSE Euronext, through its subsidiary NYSE Regulation, remains ultimately responsible for overseeing FINRA’s performance of regulatory services for the NYSE markets. The agreement involved approximately 225 staff, most of whom will be transferred to FINRA.

Locations

Below is a list of major NYSE Euronext locations:


NYSE Euronext also owns 20% of the Doha Securities Market.

References

  1. ^ a b c d e f "Annual Results 2010". NYSE Euronext. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzU2NjUzM3xDaGlsZElEPTQxMjc4MHxUeXBlPTI=&t=1. Retrieved 27 February 2011. 
  2. ^ "NYSE and Euronext 'set to merge'". BBC News. 2006-05-21. http://news.bbc.co.uk/1/hi/business/5002438.stm. Retrieved 2006-05-22. 
  3. ^ "Deutsche Boerse outbids NYSE for Euronext merger". BBC News. May 23, 2006. http://news.bbc.co.uk/2/hi/business/5007230.stm. Retrieved 2006-05-23. 
  4. ^ Lucchetti, Aaron; Macdonald, Alistair; Scannell, Kara (June 2, 2006). "NYSE, Euronext Set Plan to Form A Markets Giant". The Wall Street Journal. http://online.wsj.com/article/SB114919826887369084.html. Retrieved 2006-06-02. 
  5. ^ Willey, David (June 23, 2007). "London Stock Exchange buys Borsa". BBC News. http://news.bbc.co.uk/1/hi/business/6233196.stm. Retrieved 2007-06-23. 
  6. ^ Taylor, Edward; Lucchetti, Aaron; Macdonald, Alistair (2006-11-15). "Deutsche Börse Is Exiting Euronext Chase". The Wall Street Journal. http://online.wsj.com/article/SB116355794762023471.html. Retrieved 2006-11-15. 
  7. ^ Lucchetti, Aaron; Macdonald, Alistair (2006-12-19). "Euronext Shareholders Approve Acquisition by NYSE". The Wall Street Journal. http://online.wsj.com/article/SB116653086274154451.html. Retrieved 2006-12-19. 
  8. ^ "Big Board Holders Back Euronext Deal". The New York Times. 2006-12-21. http://www.nytimes.com/2006/12/21/business/worldbusiness/21nyse.html?ref=worldbusiness. Retrieved 2006-12-21. 
  9. ^ "Key Developments". Reuters. April 3, 2007. http://www.investor.reuters.wallst.com/stocks/key-developments.asp?rpc=66&ticker=NYX&timestamp=20070403185600. Retrieved 2007-05-11. 
  10. ^ "BlueNext Shareholders". BlueNext.fr. 2010-08-08. http://www.bluenext.fr/exchange/shareholders.html. Retrieved 2010-08-08. 
  11. ^ "NYSE Euronext (NYX) Profile". nyse.com. 2010-08-08. http://www.nyse.com/about/listed/nyx.html. Retrieved 2010-08-08. 
  12. ^ German firm in talks to buy NYSE Euronext newsday.com (February 10, 2011)
  13. ^ http://www.bloomberg.com/news/2011-02-09/nyse-deutsche-boerse-are-said-to-be-in-advanced-talks-to-merge-exchanges.html
  14. ^ Weidner, David, “Nachtmare on Wall Street. Commentary: An American institution goes kaput”, MarketWatch, 15 February 2011.
  15. ^ "Nasdaq, ICE Make Hostile Play for NYSE Euronext". New York Times: DealBook. http://dealbook.nytimes.com/2011/04/01/nasdaq-ice-make-hostile-bid-for-nyse-euronext/?hp. Retrieved 4/1/2011. 
  16. ^ Schaefer, Steve, "Nasdaq, ICE Withdraw Bid For NYSE Euronext (Update)", Forbes, 5/16/2011 @ 9:44AM. Retrieved 2011-10-13.
  17. ^ "Nasdaq, ICE Taking NYSE Bid Directly to Traders Who Would Profit From Deal". Bloomberg L.P.. http://www.bloomberg.com/news/2011-05-09/nasdaq-ice-taking-nyse-bid-directly-to-traders-who-would-profit-from-deal.html. Retrieved 15 May 2011. 
  18. ^ Rummer, Andrew, and Peter Chapman, editors, "NYSE Euronext May Seek EU Hearing to Defend Deutsche Boerse Deal", Bloomberg, October 13, 2011 11:06 am EDT. Retrieved 2011-10-13.
  19. ^ "NYSE agrees to buy one-third stake in SIAC for $40 mln". Marketwatch.com. 2006-10-25. http://www.marketwatch.com/story/nyse-agrees-to-buy-one-third-stake-in-siac-for-40-mln. Retrieved 2006-10-25. 
  20. ^ "Nyse buys TransactTools". Finextra.com. 2006-12-13. http://www.finextra.com/fullstory.asp?id=16264. Retrieved 2006-12-13. 
  21. ^ "NYSE Euronext to Acquire Wombat Financial Software". mondovisione.com. 2008-01-14. http://www.mondovisione.com/index.cfm?section=news&action=detail&id=71883. Retrieved 2008-01-14. 
  22. ^ "Atos Origin, NYSE Complete AEMS Joint Venture Transaction". huliq.com. 2008-08-12. http://www.huliq.com/66280/atos-origin-nyse-complete-aems-joint-venture-transaction. Retrieved 2008-08-12. 
  23. ^ "NYSE Euronext to pay 95 pct premium for NYFIX". reuters.com. 2009-08-27. http://www.reuters.com/article/mergersNews/idUSN2730860320090827. Retrieved 2009-08-27. 
  24. ^ "FINRA to Perform NYSE Regulation’s Market Oversight Functions". NYSE News Releases. 2010-05-04. http://www.nyse.com/press/1272880693677.html. Retrieved 2010-09-22. 

External links

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