NYSE-Euronext Merger Could Spawn New London Exchange

by Ulrika Lomas, for LawAndTax-News.com, Brussels

20 June 2006

John Thain, Chief Executive of the New York Stock Exchange (NYSE), has revealed that the NYSE's recent merger with pan-European exchange group Euronext could lead to the creation of a new bourse in London to rival the London Stock Exchange (LSE).

In an interview with the Financial Times, published on Monday, Mr Thain explained that should the the newly merged NYSE/Euronext fail to compete with the LSE by being unable to attract sufficient numbers of new listings, then the creation of a new exchange in London could be one of two options considered by the company.

Another option that Mr Thain stated that he would "not rule out" was the outright purchase of the LSE.

The New York Stock Exchange had been exploring the idea of buying out the LSE prior to its merger with Euronext, but the NASDAQ, which already owns 25% of the LSE, appears to be the front runner in the race to acquire the London bourse.

On June 1, NYSE and Euronext announced that both companies had signed an agreement to combine their respective businesses in a merger of equals.

The new group, to be named NYSE Euronext, is likely to globally redefine the marketplace for trading cash and derivative securities.

The strategic partnership creates the world’s largest securities marketplace, with a combined market capitalisation of around EUR15 billion ($20 billion).

With global market leadership positions across cash equities, derivatives, market data and technology, NYSE Euronext will be the world’s most liquid marketplace, with average daily trading value of approximately EUR80 billion, and the world’s premier listing venue, with total market capitalisation of listed companies at around EUR21 trillion.

Although the merger is an apparent fait accompli, Deutsche Boerse hasn't ruled out the possibility of its own deal with Euronext.

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