NYSE Euronext said it had not been notified by the European Commission of any “official decision” on its merger with Deutsche Boerse, after a pair of media reports that the nearly year-old deal will not be approved on anti-competition grounds.
The operator of the nearly 140-year-old New York Stock Exchange said:
“NYSE Euronext has not yet received any official decision by the European Commission regarding the requested merger of both companies. The Commission has announced that it will make its final ruling on whether to clear the proposed merger by February 9, 2012. As a matter of policy, we cannot comment on speculation.”
This follows reports in Europe and the United States that the merger was on the rocks.
In Europe, the Financial Times reported:
European competition officials have recommended blocking the tie-up between Deutsche Börse and NYSE Euronext, the German and US exchange operators, setting in motion three weeks of frantic lobbying to salvage the deal.
Joaquín Almunia, the European competition commissioner, has told the merger parties that he plans to prohibit the bid to create the world’s biggest exchange group unless they are willing to sell-off one of the groups’ main derivatives businesses – a step executives refuse to take.
In the United States, the Fox Business Network reported:
EU regulators have nixed the proposed $11.2-billion merger between NYSE Euronext and Deutsche Boerse on concerns that the deal would create a lack of competition in the derivatives market, FOX Business's Charlie Gasparino reports.
NYSE Euronext will appeal the decision and plans to launch a big lobbying effort with politicians in Europe, according to Gasparino.
NYSE Euronext said that any preliminary judgment will get reviewed by the full commission and that it will respond.
Under the European Commission's formal process, any preliminary recommendation by the case team would subsequently be vetted and acted on by the entire European Commission. We look forward to pressing the case for this compelling transaction in that forum.
In late December, NYSE Euronext chief executive Duncan Niederauer said that the merger partners would make their “final push” for approval this month.
In an email sent to employees, Niederauer said “we are hopeful” that the latest round of offers to antitrust regulators in Europe will seal the deal with the German exchange operator and clearing services provider that has been in the works since February.
“We offered antitrust regulators a three-year moratorium on fee increases should we be allowed to proceed with the merger,’’ he told employees. “Under this agreement, we would not raise published trading and clearing prices for derivatives on NYSE Liffe and Deutsche Boerse’s Eurex market. This offer has been described positively in the media and we are hopeful that it will have an equally positive impact on the policymakers who will decide on the merger.”
Clearance to merge from the U.S. Department of Justice, received just before Christmas, is an indication of “continued momentum for our deal,’’ he said.
The “final push” will be to convince Europe’s College of Commissioners “that our proposed deal is good for Europe and does not impede competition,’’ he said.
The Justice Department Thursday issued a consent decree that allows the merger to proceed but with Deutsche Boerse required to divest itself of an interest it holds in a rival U.S. stock exchange, Direct Edge.
That stake is held by the International Securities Exchange, an options exchange operator based in New York. ISE in turn is wholly owned by Eurex, the derivatives exchange of Deutsche Boerse.
Securities Technology Monitor last week predicted the deal will go through. Here’s how.
Tom Steinert-Threlkeld writes for Securities Technology Monitor.