NYSE Group, Inc. and Euronext N.V. announced on Thursday that they will merge in a cash and stock trade deal worth about $10 billion to create the first trans-Atlantic stock exchange to be called NYSE Euronext.
The partnership will create the world's largest securities marketplace with its U.S. headquarters in New York and International headquarters in Paris. The new group will be a U.S. holdings company with a total market capitalization of about $20 billion and a $27 trillion valuation for the companies trading in NYSE Euronext.
A partnership with Euronext fulfills our shared vision of building a truly global marketplace with great breadth of product and geographic reach that will benefit all investors, issuers, and our shareholders and stakeholders,â€ said NYSE Group CEO John A. Thain in a statement.
Thain will go on to become the CEO of NYSE Euronext in what is expected to be a six-month regulatory approval process. The bid by the NYSE Group beat an earlier offer last month by German stock exchange operator Deutsche Boerse AG.
The proposed agreement requires that each share of NYSE be converted to one share of NYSE Euronext common stock. Euronext shareholders will be offered the opportunity to exchange each of their shares for 0.980 shares of NYSE Euronext stock and â‚¬21.33 ($27.42).
Jean-François Théodore, Euronext's CEO will become the Deputy CEO and head of International Operations for the combined group. He called NYSE the best partner for consolidation.
This merger of equals, based on a balanced governance structure, will deliver significant shareholder value from substantial, quantified and deliverable synergies, and will allow Euronext to play a full role in reshaping the global capital market, Théodore said.
The stock exchanges of the new company, which will be in New York, Paris, Amsterdam, Brussels and Lisbon will still be under jurisdiction of local regulatory bodies according to the agreement.
The companies believe that there will be a savings of $375 million under the new company, with $250 million in savings resulting from a combined computerized platform.
Citigroup Corporate and Investment Banking is acting as financial advisor to NYSE group. ABN Amro and Morgan Stanley are advising Euronext.
Shares of NYSE Euronext will be listed on both the New York Stock Exchange and Euronext.
Jan Michiel Hessels, the Chairman of the Supervisory Board of Euronext and Thain will give further details of the merger in a press conference scheduled for Friday afternoon in Paris.