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NYSE Euronext (NYSE:NYX), the parent company of the 200-year old New York Stock Exchange, is to be sold for US$8.2 billion worth of cash and stocks to a relatively new exchange firm.
In a statement, the world’s largest stock exchange operator signed a definitive agreement to be acquired by a rival exchange group, 12-year-old InterContinental Exchange, Inc. (NYSE:ICE), to create an even larger stock exchange.
Shares of NYSE Euronext listed on its New York Stock Exchange rose 31.6% to US$31.50 at 11:25 AM local time at volume of over 46 million shares, a couple of hours after the news was released.
On the other hand, stocks of Atlanta-based ICE dropped 2.7% to US$124.90, following the announcement.
The transaction is valued at US$33.12 per NYSE Euronext share, a 37.7% premium on the said firm’s closing price yesterday.
Shareholders will either be paid in cash or shares or a combination of both, such that the total cash consideration of the deal will only be 33% and remaining 67% will be in stocks of the new enlarged group.
NYSE Shareholders will control 36% of ICE when the deal, backed by the Boards of both firms but which still needs the approval of regulators, is completed sometime during the first half of 2013.
Merger
“The acquisition combines two leading exchange groups to create a premier global exchange operator diversified across markets including agricultural and energy commodities, credit derivatives, equities and equity derivatives, foreign exchange and interest rates,” the joint statement of NYSE Euronext and ICE read.
They added that “the combined company will be well positioned to deliver efficiencies while serving customer demand for clearing and risk management globally.”
NYSE Euronext operates a network of stock exchanges where about a third of the world’s traded equities are listed with a total traded value of US$12.693 billion as of October 2012, according to the report of the World Federation of Exchanges; whilst ICE provides internet-based trading of commodities, including sugar, cotton, crude oil, and foreign exchange.
Jeff Sprecher, Chairman and Chief Executive of ICE, will become the Chairman and CEO of the combined group whilst current NYSE CEO, Duncan Niederauer, will become President as well as CEO of the NYSE Group.
The deal comes a year after a failed US$11 billion takeover bid from ICE and NASDAQ OMX Group, Inc.
