An Atlanta-based company announced Thursday that it will purchase the New York Stock Exchange (NYSE) in a multi-billion dollar deal that analysts said is motivated almost completely by the company’s European interests.
NYSE Euronext, which has owned the NYSE since 2006, agreed Thursday to a buyout offer of its shares from 12-year old Intercontinental Exchange (ICE) for approximately $6.2 billion.
ICE previously partnered with the NASDAQ-OMX in a failed bid to purchase the NYSE in 2011.
Despite some fear of “market consolidation” in recent years on the part of regulators, experts predicted Thursday that the acquisition will go through. Pending regulatory review in the U.S. and Europe, the deal will go into effect in the second half of 2013.
Though headquartered in Atlanta, ICE also has offices in eight other locations, including London and Singapore.
“ICE will maintain dual headquarters in Atlanta and New York. New York headquarters will be located in the Wall Street building, home to the iconic trading floor. ICE will also open a new midtown Manhattan office in June 2013,” according to a statement by ICE management.
But despite its self-conscious reference to the “iconic trading floor,” ICE has little interest in the U.S. stock market, according to analysts.
“The rationale for the deal lies in Europe,” Berenberg Bank analyst Richard Perrott wrote in a note to clients.
ICE made the deal in order to acquire Liffe, an interest rate betting exchange, which NYSE owns. Liffe will account for approximately 40 percent of NYSE’s profits next year. ICE plans to merge Liffe with its London-based arm, ICE Clear Europe.
“Putting ICE and Liffe together would create a major London-based derivatives exchange, specializing in interest rates, commodities and credit,” Perrott wrote. “Liffe would shift to using ICE’s existing clearing services, removing the need for NYSE Euronext to pursue its own [central clearing house].”
“As you have come to expect from me, I tell it like it is. … In that vein let me be clear that this combination – while friendly and strategic – is an acquisition, not a merger of equals,” NYSE Euronext CEO Duncan Niederauer said in a memo Thursday.