NYSE Euronext Inc. (NYX: Quote) is in talks to sell itself to rival IntercontinentalExchange Inc. (ICE: Quote) and a deal could be announced as early as Thursday, according to the Wall Street Journal, citing people familiar with the discussions.
ICE is reportedly expected to pay a combination of cash and stock for the parent of the New York Stock Exchange. Shares of NYSE Euronext gained more than 21 percent in extended trade on Wednesday following the news.
New York-based NYSE Euronext operates various stock exchanges, including the New York Stock Exchange, NYSE Arca, Inc., and NYSE Amex LLC in the U.S. and five European-based exchanges that comprise Euronext N.V.
Atlanta, Georgia-based ICE operates regulated exchanges, clearing houses, and over-the-counter or OTC markets for agricultural, credit, currency, emissions, energy, and equity index contracts.
The merger talks come about more than a year and a half after ICE and Nasdaq OMX Group Inc. (NDAQ: Quote) launched a joint hostile $11.3 billion bid for the Big Board. However, the two companies were forced to retreat in May 2011 after their takeover plan was opposed by U.S. antitrust officials.
NYSE Euronext, which agreed to merge with Deutsche Börse AG (DBOEF, DBOEY) before ICE and Nasdaq stepped in with their bid, had rejected the duo’s unsolicited proposal.
However, NYSE Euronext said in February 2012 that it officially agreed with Deutsche Boerse to terminate their proposed merger after the European Commission informed the companies of its decision to block the deal due to monopoly concerns. A merger of the two stock exchange operators would have created the world’s biggest stock and derivatives exchange.
The blocking of the deal was yet another instance of big stock exchange merger deals failing to fructify.
London Stock Exchange Group Plc (LSE.L) had in 2011 agreed to combine with Toronto-based TMX Group, Inc. (X.TO, TSX_X.TO), while in October 2010, Singapore Exchange Ltd. agreed to buy Australia-based ASX Ltd. for about A$8.4 billion. Both the deals failed to materialize.
Founded in 2000, ICE has its roots in commodity trading. A deal to acquire NYSE Euronext would give ICE access to the NYSE Liffe derivatives market in London, providing the exchange operator with an entry point to fixed-income futures.
ICE has a market capitalization of $9.33 billion, compared to NYSE Euronext’s market capitalization of $5.84 billion.
ICE closed Wednesday’s trading at $128.31, up $0.27 or 0.21 percent on a volume of 1.69 million shares. In after-hours, the stock gained $1.59 or 1.24 percent to $129.90.
NYX closed Wednesday’s trading at $24.05, up $0.21 or 0.88 percent on a volume of 3.30 million shares. In after-hours, the stock further gained $5.15 or 21.41 percent to $29.20.
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by RTT Staff Writer
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