Nasdaq OMX has teamed up with IntercontinentalExchange to launch a $11.3 billion (£7 billion)hostile bid for NYSE Euronext, offering 19 per cent more than a rival approach from the Deutsche Börse last month.
The move is expected to trigger an intense and politically charged battle for control - US politicians have already expressed reservations about control of America’s oldest stock exchange being passed to the German-owned Börse.
Nasdaq are offering $42.50 a share in cash and stock. As part of the proposal, ICE would purchase NYSE’s futures businesses and Nasdaq would control NYSE’s remaining businesses, including the NYSE Euronext stock exchanges in New York, Paris, Brussels, Amsterdam and Lisbon, as well as the US options division.
Nasdaq and NYSE would merge the trading, listings, options and market technology businesses of the two companies to create a leading international exchange, based in New York, with a presence in sixteen countries and technology used in more than 60 markets.
ICE and Nasdaq will continue to operate as separate businesses.
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The bid had been widely anticipated as global exchanges consolidate and competition between exchanges increases. During the past five years more than 90 per cent of the top 100 global listings chose not to list in the US.
After the Deutsche Börse made its bid for NYSE many analysts said that “doing nothing” was no longer an option for Nasdaq’s chief executive Robert Greifeld.
Mr Greifield, who is regarded as an innovative dealmaker, said that the combination of the two leading US exchanges would deliver an opportunity to build a global exchange platform with the scale and growth potential to benefit investors, issuers and other market participants.
“We believe it would increase transparency and liquidity in US markets and create jobs as new companies raise capital. For Europe it strengthens the equity markets by creating a new, truly pan-European equity trading platform and solidifies Paris and London as premier financial hubs,” he said.
Jeffrey Sprecher, chairman and chief executive of IntercontinentalExchange, said: “In addition to expanding our clearing capabilities to interest rates, we would enable increased competition in the US, where interest rates futures are dominated by one exchange with approximately 95 percent market share. In Europe we would offer an attractive solution to preventing that same business from being dominated by a single competitor, while preserving global innovation around additional risk management services.”
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News of the bid comes after the London Stock Exchange agreed a merger with Canada’s TMX and the Singapore bourse. The Australian Securities Exchange announced plans in October for a merger, while Hong Kong Exchanges and Clearing and the Tokyo Stock Exchange group have said that they are looking for potential partners. According to data compiled by Bloomberg, almost $100 billion of completed exchange takeovers have taken place since January 2000.
NYSE Euronext could not be reached for comment.