US technology index provider NASDAQ and the Swedish exchange OMX have announced that they have entered into an agreement to combine the two companies, creating the world's premier exchange and technology company.
The combination will create the largest global network of exchanges and exchange customers linked by technology, and is expected to provide significant benefits for customers, shareholders and other stakeholders in both companies.
In a statement, the two exchanges stated that the new group, to be called The NASDAQ OMX Group, brings together two companies with a common culture and vision of innovation, competitiveness and pioneering technological expertise.
The combination will be effected through a cash and stock tender offer by NASDAQ for all outstanding shares in OMX. The consideration offered is equivalent to 0.502 new NASDAQ shares plus SEK94.3 in cash for each OMX share. Based on NASDAQ's closing price on 23 May, 2007, the offer values OMX at SEK208.1 per share, equivalent to SEK25.1 billion ($3.7 billion) and represents a premium of 19% to the closing price of SEK174.5 per OMX share on 23 May, 2007, (the last full trading day prior to the announcement of the offer) and a premium of 25% to the volume weighted average price of SEK165.9 per OMX share over the 20 trading days up to, and including, 23 May, 2007.
Robert Greifeld, Chief Executive Officer of NASDAQ, commented:
"The future of exchanges is about technology, flexibility and scale. NASDAQ and OMX together deliver all of these benefits. Our technology leadership and track record in linking trading platforms means we will offer issuers and investors unique benefits which were not available in one company until now. This combination provides our organizations with the ability to grow and accelerate the global flow of equity capital. At the same time, it provides us with an excellent platform for further expansion into derivatives and other asset classes. Our organizations bring together very complementary businesses, and we see many new opportunities for growth in an era of unprecedented change and development for exchanges."
Magnus Bocker, Chief Executive Officer of OMX, added:
"This combination creates a new leader in the exchange industry. By utilizing the combined entities' joint expertise and competencies we will create an outstanding platform for future growth. Issuers, members, information vendors and investors on both NASDAQ and OMX Nordic Exchange will all benefit from its new global context. The combination also provides benefits for OMX's global technology customer base, as it enables an increased focus on research and product development in the most important and fastest growing areas of the exchange technology market."
The combined group will have 2,349 employees in 22 countries with pro forma revenues for the financial year 2006 of more than $1.2 billion (SEK8.3 billion). The relative values of the companies under the terms of the offer and based on NASDAQ's closing share price as of 23 May, 2007 are 58% NASDAQ and 42% OMX. The pro forma market capitalization of The NASDAQ OMX Group will be approximately $7.1 billion (SEK48.6 billion), of which NASDAQ shareholders will own approximately 72%, and OMX shareholders will hold approximately 28% as a result of the cash component of the offer.
The combined group will be governed by representatives from both NASDAQ and OMX under the leadership of Robert Greifeld, who will serve as Chief Executive Officer, and Magnus Bocker, who will serve as President. The board of directors of the combined group will consist of 15 members, including nine representatives from NASDAQ, five representatives from OMX and the Chief Executive Officer of the combined group. The NASDAQ OMX share will be listed on NASDAQ and on OMX Nordic Exchange.
Together, the NASDAQ and OMX exchanges will process an average daily volume of 7.4 million trades, representing a value of approximately $61 billion (SEK418 billion). The NASDAQ and OMX exchanges will have approximately 4,000 companies listed from 39 countries with an aggregate market capitalization of approximately $5.5 trillion (SEK37.6 trillion).
OMX Nordic Exchange is Europe's third largest marketplace for trading and clearing equity-related derivatives.
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