EU Discussed Extending Deadline For NYSE-D.Boerse Merger Ruling
15 Febbraio 2012 - 5:12PM
Dow Jones News
European Union lawmakers discussed further extending the Feb. 9
deadline for ruling on the proposed merger of NYSE Euronext (NYX)
and Deutsche Boerse AG (DB1.XE, DBOEF) before ultimately choosing
to block the deal, according to records of the European
Commission's Feb. 1 meeting.
It took policymakers just over an hour to reach a decision on
the matter, though some raised questions as to how prohibition of
the exchanges' merger would impact regulators' efforts to shift
more off-exchange derivatives trading toward regulated venues, and
the prospects for publicly listed companies to raise investment
capital in the European Union.
E.U. antitrust examiners led by Commissioner Joaquin Almunia,
who was closely involved in weighing the proposed $18 billion deal,
determined that combining Europe's two largest derivatives markets
by volume would have constituted a monopoly harmful to both
customers and potential new exchanges.
NYSE Euronext and Deutsche Boerse protested that view, arguing
that competition officials should have included in their
competitive equation the much-larger market in derivatives that are
traded off-exchange, such as interest-rate swaps.
Minutes of the European Union meeting released this week show
that members of the commission did consider the question of such
over-the-counter derivatives markets, though in a different
way.
Allowing Deutsche Boerse and NYSE Euronext to combine their
derivatives units would have made their existing business even more
profitable as more off-exchange derivatives shift toward
clearinghouses and regulated trading platforms, Almunia told EU
commissioners, and would also raise the prospect of a monopoly for
users of such markets.
Extending the deadline for deciding the deal -- which had
already been pushed back several times from the initial
mid-December end-date -- was possible but pointless, according to
Almunia. He assured commissioners that he had discussed several
times with Deutsche Boerse and NYSE Euronext the only possible
remedy that would ease concerns over concentration, namely the sale
of one of the company's derivatives exchanges. Both firms had vowed
from the start that this step wasn't one they were willing to
take.
European Commission members in the end expressed "very broad
support" for the decision to block the deal, according to the
meeting minutes.
-By Jacob Bunge, Dow Jones Newswires; 312 750 4117;
jacob.bunge@dowjones.com
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