NYX Nyse Euronext

The chief executive of NYSE Euronext (NYX) said that European Union antitrust regulators' analysis of his company's planned merger with Deutsche Boerse AG (DB1.XE, DBOEF) was "fundamentally flawed," after regulators recommended blocking the deal.

Competition authorities that have come to view a planned combination of the two exchange groups' futures markets as a monopoly on European futures and options trade have ignored competing markets in off-exchange derivatives and overseas platforms, NYSE Euronext CEO Duncan Niederauer said in a video message to his employees.

"I have to tell you I think that's a conclusion that results from a fundamentally flawed technical analysis that ignores the realities of the marketplace that we live and work in every day," Niederauer said in the message, a transcript of which was reviewed by Dow Jones.

Niederauer said that the exchanges have not yet received notice of a formal decision from competition authorities, and based his comments on news reports Tuesday.

A representative for Deutsche Boerse declined to comment.

EU antitrust examiners have determined that the merger candidates compete with one another for futures and options trade carried out on exchanges, but not with the private market in swaps and other instruments, or foreign-based derivatives exchange operators like CME Group Inc. (CME), which controls an estimated 90% of U.S. futures trade.

Those regulators Tuesday issued a recommendation that the EU not allow the merger to go ahead, according to a senior EU official, but members of the European Commission will have a final say on the matter. NYSE and Deutsche Boerse executives plan to focus resources on lobbying these lawmakers over the coming weeks, with a final ruling on the deal scheduled to come by Feb. 9.

"[O]ver the next few weeks we're going to continue to press our case directly with various Commissioners in the EU, both to highlight the serious flaws in the case team's core argument, and to ensure that there is a clear understanding of the strong benefits that our combination will bring to a broad set of stakeholders in Europe," Niederauer said.

--By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

--Ulrike Dauer in Frankfurt contributed to this article.

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