Niederauer: NYSE-DB Deal All But Dead

Duncan Niederauer, CEO of NYSE Euronext, said at the Davos economic summit that he 'misjudged the process' that would be needed to get his company's merger with Deutsche Boerse approved.

There was only a “glimmer of hope” the year-old deal would succeed, Niederauer said, according to a report in the Financial Times.

The European Union's antitrust authority appears on the brink of recommending that the merger not be approved. The panel’s concern: That the merger of the two companies’ European derivatives markets and clearing operations would create a monopoly.

Deutsche Boerse operates Eurex Group, the second largest derivatives market in the world, and NYSE Euronext operates NYSE Liffe, the third largest. The two want to compete on a worldwide basis with CME Group, the Chicago Mercantile Exchange operator that is the number one derivatives marketplace extant.

The two operations, if merged, would control about 90 percent of the European derivatives market.

Of the 26 EU commissioners who must make a final call on the proposed deal by February 1, only about six appear to find strength in the exchange groups’ argument that this is a global market, according to the Financial Times report.

“I misjudged the process,” Mr Niederauer said, referring to the antitrust authorities’ analysis of the relevant markets.

But even if that deal does come apart at the outset of February, the head of the Nasdaq OMX Group said that that exchange operator would not make a bid for either NYSE Euronext or the London Stock Exchange.

Nasdaq made a run at LSE in 2005 and at NYSE Euronext last year.

Chief Executive Officer Robert Greifeld told reporters, also in Davos, Switzerland, that he wouldn’t consider a second attempt at NYSE Euronext because the U.S. Justice Department rejected the idea.

Tom Steinert-Threlkeld writes for Securities Technology Monitor.