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Dublin: 14 °C Tuesday 21 November, 2017

Deutsche Börse and NYSE merge to create world's biggest exchange

The operator of Germany’s stock exchange announces a merger deal to create the largest exchange on earth.

Executives from Medley Capital Corporation attend the opening bell at the NYSE this morning.
Executives from Medley Capital Corporation attend the opening bell at the NYSE this morning.
Image: Mark Lennihan/AP

DEUTSCHE BORSE and NYSE Euronext have announced plans to merge, to form what will become the world’s largest stock and derivatives exchange.

The two markets say their plan will result in combined savings of about €100m a year, though the combined selling of products will also yield an extra €300m a year in synergies, the FT reports.

The firms’ combined revenues – which, on 2010 figures, would total €4.1bn – would make the market easily the largest exchange in the world, and will see the firms restructured within a new Netherlands-based holding company, with its own shares listed on markets in Paris, New York and Frankfurt.

The newly-constituted entity will have most of its board – 10 out of its 17 seats – appointed by Deutsche Borse, however, making the deal a practical takeover on the part of the German-based exchange.

NYSE Euronext’s CEO Duncan Niederauer will become the CEO of the new entity, however, with Deutsche Borse’s chief executive Reto Francioni will become its chairman.

A separate FT piece quotes analysts as suggesting that the combined firm would oversee the trading of about 28 per cent of European equities, and 40 per cent of US securities. The merged corporation entity will list corporations with an aggregate value of about €11.1 trillion.

Each local market is to keep its name, however, in order to assuage political fears in the United States that the replacement of the ‘New York Stock Exchange’ name with a non-Anglophone name would cause a flight of wealth.

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