The parent company of the New York Stock exchange and three other financial institutions have agreed to purchase a combined stake of 20 percent in the National Stock Exchange of India, a move which contributes to a global trend of financial markets consolidation.
NYSE Group, Inc. (NYSE: NYX), along with the Goldman Sachs Group (NYSE: GS), General Atlantic, LLC, and Softbank Asian Infrastructure Fund will each purchase a 5 percent stake in the NSE from five Indian institutions. NYSE says it will pay $115 million for its stake, which would value the NSE at $2.3 billion. The NSE trades in equities, derivatives and fixed income markets.
We are pleased to welcome the NYSE Group and other new stakeholders in NSE, said Ravi Narain, MD & CEO of NSE. In a rapidly integrating world of financial markets, this timely partnership brings together the strengths of institutions from North America, Europe and Asia.
The deals come following changes to foreign direct investment (FDI) policies recently adopted in India. The 5 percent stake for each purchasing company is the maximum allowed by current securities law in India.
NYSE Group Inc., is expanding beyond the U.S. and is in the process of merging with Paris-based Euronext NV.
Our investment in Indiaâ€™s National Stock Exchange complements our global growth strategy, said John A. Thain, Chief Executive Officer, NYSE Group. The National Stock Exchange shares our global vision. Ravi Narain leads a growth oriented organization with a talented, innovative and proven management team.â€
U.S. financial markets are making efforts to integrate with overseas partners to take advantage of the increasing number of companies deciding to list their companies abroad. Currently, executives at NYSEâ€™s North American rival, Nasdaq, are aggressively pursuing a $5.2 billion buyout of the London Stock Exchange.
The firms Selling their stake are ICICI Bank Ltd., IFCI Ltd., IL&FS Trust Company Ltd., Punjab National Bank Ltd. and General Insurance Corp. of India Ltd., said NSE in a statement.
Shares of NYSE Group, Inc. rose $4.72, or 4.51 percent, to $109.20 in late afternoon trading on the New York Stock Exchange.