NYSE Acquires Euronext for $10 B

Elena
02 Jun, 2006
New York City

If approved by regulators and shareholders, the consolidation of the NYSE Group Inc. and Euronext would create a single platform where traders could deal in stocks, options, futures, commodities and corporate bonds across two continents for up to 12 hours daily. NYSE Euronext would manage about $2.1 trillion in stock trades each month and boast a market value of about $20 billion.

[R]8:00AM The NYSE agreed to acquire Euronext for $9.96 billion.[/R]
The NYSE agreed to acquire Euronext for $9.96 billion in cash and stock, trumping a larger rival offer from Deutsche Boerse AG. Euronext is Europe''s second-largest stock exchange, operating bourses in Paris, Amsterdam, Brussels and Lisbon. On approval of the deal, NYSE Euronext will manage about $2.1 trillion in stock trades each month and boast a market value of about $20 billion. If approved by regulators and shareholders, the consolidation of the NYSE Group Inc. and Euronext would create a single platform where traders could deal in stocks, options, futures, commodities and corporate bonds across two continents for up to 12 hours daily. The merger of NYSE and Euronext would top Chicago Mercantile Exchange Holdings Inc., worth about $15.6 billion. The merging of the two exchanges is expected to launch a wave of consolidation in global financial markets, one that might eventually arrive at a round-the-clock worldwide trading system. Under the proposal, each NYSE share would be converted into one share of common stock of the new combined company NYSE Euronext. Holders of Euronext ordinary shares would be offered the right to exchange each of their shares for 0.98 share of NYSE Euronext stock and 21.32 euros in cash. The acquisition is expected to generate about $375 million in savings. The board of a combined company would include 11 directors from NYSE and nine from Euronext.


[R]7:30AM Asian markets finished higher following US gains overnight.[/R]
Asian markets finished higher. Japan''s Nikkei 225 Index advanced 285.57 points, or 1.8%, to close at 15789.31 points. The benchmark finish swung an early drop sparked by reports that prosecutors were investigating the Murakami investment fund for possible securities law violations during a sale of Nippon Broadcasting System shares. Among the companies which advanced were Mitsubishi Estate, climbing 2.5% and Nomura Holdings, putting up 2.3%. Pharmaceutical stocks also rose, with Takeda Pharmaceutical reporting 1.5%. Hong Kong''s benchmark Hang Seng Index advanced 267.44 points, or 1.7%, to 15912.71. China Mobile, a key component of the blue-chip index advanced 4.3%. China Netcom added up 3.1% and China Netcom rose 3.6%. Singapore''s Straits Times Index closed up 32.72 points, or 1.4%, at 2419.42 points. Singapore Airlines gained 3.3% on profit-taking following declining oil prices. South Korea’s Korea Composite Stock Price Index, or Kospi, closed up 1.1%, or 13.95 points, at 1309.04. Stocks of the three largest shipbuilders, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, all advanced, reflecting the $2.53 billion worth of orders for the building of supertankers. Australia''s S&P/ASX 200 advanced slightly to closed up 0.3%, or 16.6 points, to 5077.2, despite losses in the mining sector. BHP Billiton lost 0.6% and Rio Tinto dropped 0.5%.


[R]6:30AM European markets advanced on merger deal.[/R]
Markets in Europe were higher in early trade on Friday. Other factors, aside from the merger, were the disappointing purchasing managers’ data and a slightly higher initial claims report, taken as proof of slowing economic growth and a probable relief of inflationary concerns. The telecom sector performed strongly again, following news that a consortium of companies were about to announce a bid for Portugal Telecom. KPN advanced 1.2% after securing a better position by buying Demon Netherlands from Thus. Telefonica added 0.9% following its upgrade by Bernstein and JPMorgan’s lifting its price target on the Spanish operator and reaffirming the “overweight’ rating. Porsche, sports car manufacturer, advanced 3.6% on US sales. Raiffeisen International, Austrian banking, rose 4.8% on an improved rating by Deutsche Bank.

Light, sweet crude oil for July delivery advanced 53 cents to $70.87 a barrel and July Brent on rose 17 cents to $69.56 per barrel. Gold opened Friday at a price of $626.30 a troy ounce, lower from $630.60 late Thursday. The euro rose slightly against the dollar. In morning trading, the euro bought $1.2803, higher than $1.2797 on Thursday in New York. The British pound dropped to $1.8627 from $1.8643, while the dollar advanced to buy 112.75 Japanese yen from 112.68 the day before.