Exchange, Telecom Deals Prove Antitrust is So 2012

A telecom sector revitalized by the recapitalization of Sprint and the expansion of T-Mobile's stong wireless network may play to the favor of consumers, who could see smartphone service improve over the long haul and see phone bills go down as the telecom sector's third and fourth players nip on the heels of titans AT&T and Verizon once more.

In a December telephone interview, Craig Moffett, a telecom sector analyst at Bernstein Research and a noted industry bear said the biggest industry-wide theme of 2013 may be whether a revived Sprint pushes wireless prices down, in a push to regain market share. Both Sprint and MetroPCS - T-Mobile are price competitors to AT&T and Verizon, but a lack of network coverage and subsidized iPhone's, respectively, has caused persistent 2012 market share losses.

For NYSE Euronext, the imperative of consolidation was made bluntly on Thursday. On an earnings call with analysts NYSE executives simply said that the company's diversified business model of international stock and derivatives trading, in addition to technology and clearing platforms wasn't being appreciated by investors.

At Stifel Nicolaus analyst Matthew Heinz, meanwhile, noted a "limited overlap" in ICE and NYSE's businesses and said that NYSE's persistent stock market share losses and its lack of a fixed income derivative centralized clearing platform ultimately beckoned some type of consolidation.

On the M&A call, ICE executives noted that a tour of regulators in five countries was "very well received," and that the proposed merger would "get a lot of support in the market," referring to antitrust officials.

While nothing is a guarantee, 2013 may very well be the year the telecom and financial exchange sector's finally consolidate after few saw sign significant consolidation as possible given recent failed deals and stricter antitrust enforcement in the E.U. and U.S.

In Thursday's exchange merger, ICE's Jeffrey C. Sprecher will continue as Chairman and CEO of the combined company, while NYSE Euronext head Duncan L. Niederauer will be president of the combined company and CEO of NYSE Group. NYSE Euronext would also see four of its board members join ICE's board, which would be expanded to 15 members.

The combined company's headquarters would be in Atlanta, where ICE is headquartered and in New York, home to NYSE.

The prospective merger is expected to close in the second half 2013, and remains subject to shareholder approval and regulatory reviews in Europe and the U.S.

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-- Written by Antoine Gara in New York

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