2ND UPDATE: NYSE Executive: Merger Necessary To Stay Competitive
14 Giugno 2011 - 12:13AM
Dow Jones News
The proposed merger of NYSE Euronext (NYX) and Deutsche Boerse
(DBOEF, DB1.XE) is the latest chapter in the iconic trading floor's
evolution to stay competitive in global markets, executives
involved in the merger told lawmakers Monday.
"Our proposed merger is simply a continued reflection of how we
must adapt and change in order to remain a leader among exchanges,
a fierce competitor that services the needs of its clients and an
advocate for transparency and fair play," NYSE Euronext Chief
Operating Officer Larry Leibowitz said in a congressional
hearing.
Without "diversifying and globalizing," NYSE would be "doomed to
become a charming but irrelevant anachronism," Leibowitz said.
Lawmakers must "ask whether this combination will threaten the
robust competition in securities exchange markets that has reduced
trading costs over the past two decades," said Rep. Bob Goodlatte
(R., Va.), chairman of the House Judiciary subcommittee holding the
hearing.
Leibowitz said the merger wouldn't threaten the competition that
has brought down transaction prices in the U.S. He also reassured
lawmakers that the name and headquarters of the NYSE wouldn't
change.
Gary Katz, the chief executive of Deutsche Boerse subsidiary
International Securities Exchange, said that would strengthen New
York as an international financial center.
"The combination of Deutsche Boerse and NYSE Euronext offers
unique short and long-term benefits for all of our constituencies:
shareholders, employees, regulators, and, importantly, our
customers, the retail and institutional investors," Katz said.
Rep. John Conyers Jr. (D., Mich.), the ranking member of the
full committee, said he thought the two companies could compete
better separately than together.
Katz said he didn't believe the merger would affect the level of
competition in the U.S. or globally. He said that different
exchanges "compete with themselves" even if they're part of the
same parent company.
Lawmakers also pressed the exchange executives about whether the
proposed merger would prompt them to lay off U.S. workers.
Leibowitz said because the companies overlap more in Europe, there
would more likely be more job losses overseas than in the United
States. However, creating a venue that spurs more initial public
offerings could also stimulate job growth, he said.
"When companies go public they create more jobs than at any
other point in their life cycle," Leibowitz said. "That's how they
get the currency to hire more people, to grow."
The merger has to be approved by the Justice Department and U.S.
regulators as well as European regulators. Leibowitz said that the
merger requires 47 different regulators to sign off on it, joking
that they might set a record.
-By Jamila Trindle, Dow Jones Newswires; 202-862-6684;
jamila.trindle@dowjones.com
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