The proposed deal between the New York Stock Exchange Euronext and Deutsche Börse AG that would create the world's largest financial exchange has apparently run into some controversy with New York Senator Charles Schumer's unintended revelations on post-merger management authority.
Reuters reports that Senator Schumer mentioned meeting NYSE Euronext Chief Executive Duncan Niederauer -- who would lead the combined entity - twice and learning that the team from NYSE would be vested with managerial control of the new operation with Mr. Niederauer as the CEO, and that both would be equally represented on the board.
However, a subsequent statement from his spokesperson clarified that Schumer had not meant to communicate any knowledge of arrangement beyond Niederauer's designation as CEO.
The question of which management team or board would be retaining a lion's share of control of the merged entity has proven to be sensitive; across the Atlantic, where the deal is being portrayed as a German takeover, allusions to NYSE retaining management control might lower the chances of its final approval.
Political backlash in the United States is not entirely unlikely either; the naming of the entity is being viewed as a critical factor and should the exchange be called DB-NYSE Group, as some reports seem to indicate, the precedence of the DB name could be seen by US as a confirmation of the fact that this was effectively a sell-out to the German exchange rather than a merger of equals.
The Senator himself is reported to have told Reuters, Some may say 'What's in a name?' but I say, 'A lot,' ...The New York Stock Exchange is a symbol of national prestige, and its brand must not suffer under this merger.
The Wall Street Journal had already quoted Wells Fargo analyst Christopher Harris as warning, There could be backlash from political circles, particularly in the U.S., given NYSE's historic symbolic importance. Bloomberg has also quoted former chairman of Goldman Sachs Group John Whitehead as saying I think it's a terrible idea and I hope it can be stopped...It would be an insult to New York City, and New York State, and indeed to all America.