Germany's Deutsche Boerse and transatlantic NYSE Euronext have announced a merger to create the world's largest bourse, pushing aside potential political and regulatory obstacles.
The German exchange operator will own 60 percent of the combined group, which will have 2010 net revenues of $5.4 billion, have dual headquarters in New York and Frankfurt and be incorporated in the Netherlands.
MICHAEL HOLLAND, CHAIRMAN OF HOLLAND & CO:
The people who are wringing their hands about the passing of an American icon are correct on the one hand. On the other hand, Deutsche Boerse was simply larger and the dominant partner. I think they were aware of that PR significance. ... Niederauer is respected and I think to have him as the CEO was a good move.
FRANK DAVIS, DIRECTOR OF SALES AND TRADING AT LEK SECURITIES IN NEW YORK
There's a lot of uncertainty. People are worried there could be an extended fight. There may be some nationalistic posturing, especially on the U.S. side now that we know that the majority of board members will be German. There will be some roadblocks before this all comes together.
From a business perspective, the deal could still happen, but it may not go through in the format that it was initially set up as. The companies may not have had the time to vet this out since they needed to rush it out after the London Stock Exchange deal with Toronto.
PAUL EDMONDSON, LAW FIRM CMS CAMERON MCKENNA
The exchanges are reacting to regulatory as well as market developments. Both the Mifid legislation now being reviewed in Europe and the international reform of OTC derivatives in the wake of the financial crisis lie behind this move.
DUNCAN HIGGINS, HEAD OF EUROPEAN ELECTRONIC TRADING AT BROKER ITG
We understand the drivers for consolidation. It's something that everyone has been predicting since Mifid in 2007. First, we had fragmentation and now we're moving to consolidation, which will offer greater efficiencies that should be passed on as lower costs for investors.
WERNER VOGT, DIRECTOR AT SIX GROUP
The future of Eurex will have to be discussed by Deutsche Boerse and SIX Group if the Deutsche Boerse/NYSE Euronext deal is successful. It is still very early days and no decision has been made but we are open to talks regarding Eurex, Scoach and Stoxx if the NYSE Euronext deal moves ahead.
HERBIE SKEET, ANALYST AT EXCHANGE CONSULTANCY MONDO VISIONE
This merger -- if approved -- creates a true thousand pound gorrilla. The new entity will be a global powerhouse, which will dominate derivatives trading in Europe and be a major force in U.S. and European cash equities trading.
JUERGEN MEYER, FUND MANAGER AT SEB ASSET MANAGEMENT, FRANKFURT:
The deal makes sense for several reasons. Developing new trading systems is the biggest cost factor for trading houses around the world and it doesn't make sense to invent the wheel twice.
(Compiled by Kirstin Ridley, reporting by Luke Jeffs in London, Maria Aspan and Christopher Sanders in New York, Christoph Steitz in Frankfurt)