With approval from the U.S. Justice Department in hand and approval from the European Commission still to be achieved, NYSE Euronext is looking for a period of relative quiet through the end of the year on its quest to merge with Deutsche Boerse.
In an email sent last week to employees, NYSE Euronext chief Duncan 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 Thursday, is an indication of “continued momentum for our deal,’’ he said.
The “final push” to convince Europe’s College of Commissioners “that our proposed deal is good for Europe and does not impede competition’’ will begin in early January, 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.
ISE has held its 31.54% minority stake in Direct Edge since 2008. ISE will have two years from the closing of the merger to complete the sale.
The European Commission remains skeptical of the merger, largely due to the prospect that Deutsche Boerse will be combining its ownership of the Eurex derivatives exchange with NYSE Euronext’s Liffe derivatives exchange, once known as the London International Financial Futures and Options Exchange.
Those two venues dominate the trading of derivatives in Europe, according for roughly 90% of volume.
Tom Steinert-Threlkeld writes for Securities Technology Monitor.