The New York Stock Exchange said it will buy cross-town rival the American Stock Exchange for $260 million in stock in addition to whatever monies are raised by the sale of the smaller exchanges headquarters.
The deal adds stock options trading, exchange-traded funds and several hundred smaller listed companies to the NYSE roster. NYSE is owned by parent NYSE Euronext, a product of last years merger between the NYSE and Euronext NV.
In a statement, the NYSE said it would save $100 million annually within two years of closing the deal.
The deal was originally thought to go for as much as $350 million.
The deal will boost the NYSE's listing and fund trading. Another benefit for the NYSE: It will let the exchange bring Amex traders onto its floor, which has become less populated in recent months as hundreds of brokers and traders respond to customers' shift to electronic trading.
Other companies that had been kicking the tires of the American Stock Exchange were Frankfurt's Deutsche Boerse and the Toronto Stock Exchange, according to unnamed Dow Jones sources familiar with the matter.
Amex introduced ETF and stock options, but has recently lost clout in the markets, in part, due to technology issues.