The New York Stock Exchange (NYSE) has agreed to buy the pan-European Euronext exchange, creating the first transatlantic stock market.

The NYSE edged out its German rival, Deutsche Boerse, to clinch the deal, which aims to create a business worth $20bn (16bn euros; £11bn). The new firm will have its US base in New York and international headquarters in Paris and Amsterdam. NYSE and Euronext said the move was a “merger of equals”.

NYSE’s $10bn cash and shares offer - which still needs to be backed by shareholders - has beaten off a bid from rival Deutsche Boerse. Stock exchanges globally are looking to merge as competition for business increases, fuelled by a shift into electronic trading.

A merged exchange has more appeal as traders, investors and issuers are all keen to reduce transaction costs - especially in clearing and settlement.

For the 214-year-old NYSE, the addition of Euronext attracts businesses which may have been put off by the extensive SOX regulations implemented after a series of corporate scandals, including the collapse of energy giant Enron.

‘Attractive combination’

Under the deal, each NYSE share will be converted into one share of common stock in the merged company, to be renamed NYSE Euronext. Euronext shareholders will have the chance to exchange each of their shares for 0.98 shares of NYSE Euronext stock and 21.32 euros in cash.
Paris-based Euronext, which operates bourses in Paris, Amsterdam, Brussels and Lisbon, will also pay its previously announced dividend of three euros per share.
The merged firm will be led by NYSE Group boss John Thain, with Euronext chief executive Jean-Francois Theodore as deputy chief executive officer and head of international operations.

Mr Thain said the deal was “an important development in the history of the NYSE, Euronext and the global capital markets”.

He added: “A partnership with Euronext fulfils our shared vision of building a truly global marketplace with great breadth of product and geographic reach that will benefit all investors, issuers, and our shareholders and stakeholders.”

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