NYX Nyse Euronext

NYSE Euronext (NYX) unveiled a plan to save $250 million in annual expenses by the end of 2014 as the exchange company refocuses on its independent strategy after the European Union blocked its planned merger with Deutsche Boerse AG (DB1.XE, DBOEF).

The effort aims to more closely integrate technology used to power NYSE Euronext's markets, streamline its organization and trim the company's business portfolio, according to documents prepared by the company for its annual investor day.

"We would view this as a very offensive step on our part," said Duncan Niederauer, chief executive of NYSE Euronext, speaking to investors and analysts Monday. "We will be giving you progress reports along the way."

The Big Board parent is tightening its belt after the EU formally blocked the Deutsche Boerse deal on antitrust grounds. It also is ramping up capital returns to shareholders. In early February, the firm resumed a $550 million share-repurchase program and Niederauer Monday reiterated the company's commitment to paying dividends.

Shares in NYSE Euronext climbed on the cost-cutting disclosure and recently were 1.9% higher at $30.57.

NYSE Euronext Chief Financial Officer Michael Geltzeiler and Chief Operating Officer Lawrence Leibowitz will lead the effort, according to the company. The plan seeks to trim $90 million in technology-related costs and $90 million in infrastructure costs, with an anticipated $70 million in savings derived from taking clearing functions in-house and other portfolio moves.

The New York company expects to achieve about one-quarter of the cost savings by the end of 2012 and 60% of them by the end of 2013.

Monday, Geltzeiler said NYSE Euronext will scale back its position in its carbon-trading joint venture, NYSE Blue, which runs a European trading platform and had planned to expand in the U.S. and Asia. NYSE Euronext has run the Paris-based Bluenext emissions market since 2007 and in 2010 merged that operation with market technology company APX to help develop the combined unit.

An agreement has been struck that will involve NYSE Euronext selling its 70% stake in APX, which was acquired in the formation of the NYSE Blue joint venture. APX will buy back that position and NYSE Euronext will retain its ownership in the Bluenext platform, as well as the NYSE Blue brand name.

Regulatory approval for the agreement is pending, according to a spokesman for NYSE Euronext.

NYSE Euronext's stakes in other exchanges also may come down, Geltzeiler said. The recent initial public offering of India's Multi-Commodity Exchange will allow NYSE Euronext to sell down its approximate $60 million position in that firm, he said, upon completion of a one-year lockup period.

Discussions are in motion for NYSE Euronext to sell some of its 20% stake in the Qatar Exchange, bought for $200 million in 2009, Geltzeiler said. NYSE Euronext aims to remain an investor there, albeit with a smaller position.

The company also could sell down its approximate 9% stake in Anglo-French clearinghouse operator LCH.Clearnet SA, which is moving ahead with a deal that would result in the London Stock Exchange Group PLC (LSE.LN) taking a majority stake in that firm. "Depending on what transpires with the LSE bid," NYSE Euronext may reduce that position as well, Geltzeiler said.

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

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