NEW YORK ( TheStreet) -- When a smaller company takes over a larger company the synergies can be exponential.That's exactly what I'm anticipating when IntercontinentalExchange (ICE - Get Report) completes its acquisition of NYSE Euronext (NYX) sometime in the second half of this year.
Euronext is the European electronic stock-exchange business that operates markets in Paris, Amsterdam, Brussels and Lisbon. The spinoff was outlined as part of the $8.2 billion transaction announced last month between ICE and NYX. The spinoff has an important goal. It will, according to the newspaper, help to "...allay potential concerns that exchanges managed from afar could diminish the influence of European financial hubs, hurting their ability to control jobs and other aspects of the business." During its conference call, NYX reiterated something first mentioned in a Jan. 31 Wall Street Journal article, that a side deal NYX reached with ICE could prevent a competing bid from arising. Under the deal, NYSE's European derivatives unit, known as Liffe, agreed to clear its trades through IntercontinentalExchange for at least two years, the newspaper reported, citing unnamed sources. The deal will remain valid regardless of whether the merger with IntercontinentalExchange closes.