Frankfurt, New York stock market operators to merge (2nd Lead)

Feb 15, 2011, 16:41 GMT

New York/Frankfurt - The operator of the Frankfurt stock market is to merge with its New York counterpart, the New York Stock Exchange (NYSE) announced on Wednesday.

Frankfurt's Deutsche Boerse is to be the majority partner in the deal with NYSE Euronext, which operates the New York stock market.

'This transaction brings together two of the most respected and successful stock exchange operators in the world,' said Deutsche Boerse chief Reto Francioni.

The two exchanges aim 'to work together open and honestly,' said Manfred Gentz, boardh chairman of Deutsche Boerse AG. 'Neither will dominate the other, neither Europe the US nor the US Europe.'

The shareholders in Deutsche Boerse, which has a higher market value than its US equivalent, are to hold 60 per cent of the merged company, which will be based in the Netherlands.

NYSE Euronext's chief executive officer, Duncan Niederauer, is to head up the new joint group, while Francioni will take over as chairman - in line with proposals made public last week.

The German side will also hold 10 of the 17 seats on the board of directors.

Earlier in the day, both companies' supervisory committees approved the deal, which aims in part to bundle their strength in the face of booming Asian markets.

One final detail that remains to be settled is the name of the merged entity, as US politicians in particular have insisted that the name must reflect New York as the symbolic home of capitalism.

'The Premier Global Exchange Group' has been touted as a working name for the new holding company, according to sources at Deutsche Boerse.

A first attempt to merge the Frankfurt and New York exchanges failed in 2008. Growing competition and other mergers - such as the recent fusion of the London and Toronto stock exchanges - have since increased the pressure for the deal to succeed.

The fusion, which still requires approval from shareholders and oversight bodies on both sides of the Atlantic, is to be completed by the end of the year.

However, the deal could still be challenged by a competitor, such as the Chicago-based CME Group.

Online: Communique by NYSE Euronext, http://dpaq.de/bEux4

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