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NYSE Group (NYX) and Euronext agreed late Thursday to a merger that will create a trans-Atlantic exchange of listed companies with a total market cap of $27 trillion.

The new company, to be called NYSE Euronext, will be a U.S. holding company with shares listed on the

New York Stock Exchange

, the companies said in a statement. The company also will be listed on Euronext Paris, trading in euros.

Euronext operates stock exchanges in Paris, Amsterdam, Brussels and Lisbon, and a derivatives exchange in London. Although NYSE was thought to be its preferred merger partner, the company also held strong negotiations with German stock exchange operator Deutsche Borse.

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Under the terms of the agreement, each share of NYSE will be converted into one share of NYSE Euronext.

Euronext shareholders will be offered the right to exchange each of their shares for 0.98 shares of NYSE Euronext and 21.32 euros in cash, and will be able to elect to receive all shares or all cash through a "mix and match" procedure.

The companies said the merger will create substantial value for all shareholders through realizing annual pretax savings of $375 million, much of which will be gained by consolidating IT systems and platforms.

NYSE CEO John A. Thain will become CEO of NYSE Euronext; Jean-Francois Theodore, currently CEO of Euronext, will be deputy CEO and head of international operations. The board will initially comprise 20 directors -- 11 designated by the NYSE and nine by Euronext.

The NYSE Euronext exchange offer for Euronext shares is expected to be launched within six months, following the satisfaction of certain conditions, including receipt of regulatory approvals, and NYSE and Euronext shareholder approval.

The parties say they are confident that the transaction raises no competition issues.