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 executives who spoke to investors during a Monday presentation.

"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.

Over the next three years NYSE Euronext plans to trim $90 million in technology-related costs and $90 million in infrastructure expenses, with an anticipated $70 million in savings derived from taking clearing functions in-house and other portfolio moves.

The effort will be led by NYSE Euronext Chief Financial Officer Michael Geltzeiler and Chief Operating Officer Lawrence Leibowitz. Some of the potential savings were identified during last year's integration planning with Deutsche Boerse, Leibowitz told investors Monday.

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.

Personnel and staff positions are likely to be reduced as part of the plan. For example, NYSE Euronext's Chief Administrative Officer Andrew Brandman last month left the exchange group and that position will be eliminated, with other executives taking on those responsibilities, Geltzeiler said.

NYSE Euronext also intends to 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.

"We felt there really was no obvious traction" for expanding the business into the U.S. and Asia, Niederauer said Monday.

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 some foreign-based exchanges also may come down. 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, Geltzeiler 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, though 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.

Shares in NYSE Euronext settled slightly higher Monday at $30.08.

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

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