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NYSE, Deutsche Boerse Announce Merger

The combined group will have 2010 combined net revenue of U.S. $5.4 billion and is expected to generate annual cost savings of around U.S. $400 million. Based on 2010 net revenues, the combined group will earn about 37% of total revenue in derivatives trading and clearing; 29% in cash listings, trading and clearing; 20% in settlement and custody; and 14% in market data, index and technology services.

Of the 15 directors, nine will be designated by Deutsche Boerse and six by NYSE Euronext.

The combined market value of the two entities is $25.5 billion, creating one of the world's largest exchange operators and a leader in derivatives trading and risk management.

Deutsche Boerse CEO Reto Francioni will be chairman of the combined entities, while NYSE CEO Duncan Niederauer will be CEO of the combined entities.

The group will have dual headquarters, in Deutsche Boerse's newly built green tower near Frankfurt and in New York, at 11 Wall St.

According to the Financial Times, the new entity will have more than 90% market share in European derivatives.

Some of the world's biggest banks have been concerned that the combined entities would have too much market power, according to FT. "In the early stages, this deal doesn't appear to have great benefits to broker-dealers," a broker at a large Wall Street bank said, according to FT.

Shares of NYSE fell 2.3% to $38.55 midday Tuesday.

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-- Written by Andrea Tse and Debra Borchardt in New York.

>To contact the writer of this article, click here: Andrea Tse.

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Copyright 2010 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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