NYSE Euronext said it would focus on its “standalone strategy,’’ while Deutsche Boerse declared this a ‘black day’ after the European Commission prohibited the merger of the two exchange operators.

The companies are in discussions to terminate their merger agreement, NYSE Euronext said. 

“This is a black day for Europe and for its future competitiveness on global financial markets. The EU Commission’s decision is based on an unrealistically narrow definition of the market that does no justice to the global nature of competition in the market for derivatives,’’ the Executive Board of Deutsche BoerseAG said. “The over-the-counter derivatives market, the major part of the market as a whole, is completely precluded. We therefore regard the decision as wrong.’’

Deutsche Boerse operates the Eurex derivatives market and NYSE operates NYSE Liffe, a rival platform. They would have controlled about 90 percent of derivatives trading in Europe, at the outset. But the two firms had global ambitions and believed the market should be defined that way.

Only by combining would the two wrest the top spot away from CME Group, based in Chicago.

“While we are disappointed and strongly disagree with the EU decision, which is based on a fundamentally different understanding of the derivatives market, it is now time to move on and return our sole focus to executing our compelling existing strategy – a strategy we have continued to implement without missing a beat over the last year,’’ said Jan-Michiel Hessels, NYSE Euronext chairman.

NYSE Euronext said it would focus on the “successful standalone strategy” that has delivered strong growth and diversification of its core trading, technology and related businesses and that it would leverage its financial strength to return capital to shareholders.

In that regard, NYSE Euronext announced its intent to resume a $550 million share repurchase program following the termination of the merger agreement and after the release of its fourth quarter and 2011 year-end results on February 10, 2012.

Tom Steinert-Threlkeld writes for Securities Technology Monitor.



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