IntercontinentalExchange to Acquire NYSE Euronext For $33.12 Per
Share in Stock and Cash, Creating Premier Global Market Operator
ATLANTA, NEW YORK and
PARIS, Dec. 20, 2012
/PRNewswire/ -- IntercontinentalExchange (NYSE: ICE), a
leading operator of global markets and clearing houses, and NYSE
Euronext (NYSE: NYX), the preeminent global equity, equity options
and fixed income derivatives market operator, today announced a
definitive agreement for ICE to acquire NYSE Euronext in a
stock-and-cash transaction. The acquisition combines two leading
exchange groups to create a premier global exchange operator
diversified across markets including agricultural and energy
commodities, credit derivatives, equities and equity derivatives,
foreign exchange and interest rates. With leading clearing
capabilities, the combined company will be well positioned to
deliver efficiencies while serving customer demand for clearing and
risk management globally.
Under the terms of the agreement, which was unanimously approved
by the Boards of both companies, the transaction is currently
valued at $33.12 per NYSE Euronext
share, or a total of approximately $8.2
billion, based on the closing price of ICE's stock on
December 19, 2012. NYSE Euronext
shareholders will have the option to elect to receive consideration
per NYSE Euronext share of (i) $33.12
in cash, (ii) 0.2581 IntercontinentalExchange common shares or
(iii) a mix of $11.27 in cash plus
0.1703 ICE common shares, subject to a maximum cash consideration
of approximately $2.7 billion and a
maximum aggregate number of ICE common shares of
approximately 42.5 million. The overall mix of the
$8.2 billion of merger consideration
being paid by ICE is approximately 67% shares and 33% cash. The
transaction value of $33.12
represents a 37.7% premium over NYSE Euronext's closing share price
on December 19, 2012.
- NYSE Euronext shareholders will own approximately 36% of ICE
shares post-transaction.
- The cash portion of the transaction will be funded by a
combination of cash on hand and existing ICE credit
facilities.
- The transaction is expected to close in the second half 2013,
subject to regulatory approvals in Europe and the U.S. and approval by
shareholders of both companies.
- The majority of run-rate expense synergies of $450 million are expected to be achieved in the
second full year post-closing.
- Earnings accretion of greater than 15% is expected in the first
year post-closing.
- As a result of the transaction, ICE clearing will be more
capital efficient and provide operational efficiencies for clearing
members.
- ICE is committed to preserving the NYSE Euronext brand. ICE
will maintain dual headquarters in Atlanta and New
York. New York headquarters will be located in the Wall
Street building, home to the iconic trading floor. ICE will also
open a new midtown Manhattan
office in June 2013.
- ICE is also committed to maintaining the position of NYSE Liffe
in London as a leading
international market operator for derivatives products, including
its benchmark interest rate complex.
- ICE intends to explore an initial public offering of Euronext
as a Continental European-based entity following the closing of the
acquisition if market conditions and European policy makers support
the offering.
- Jeffrey C. Sprecher will
continue as Chairman and CEO of the combined company and
Scott A. Hill as CFO. Duncan L. Niederauer will be President of the
combined company and CEO of NYSE Group. Four members of the
NYSE Euronext Board of Directors will be added to the ICE Board of
Directors which will be expanded to 15 members.
"Our transaction is responsive to the evolution of market
infrastructure today and offers a range of growth opportunities,
while enhancing competition in US and European markets and
broadening our ability to address new markets and offer innovative
products and services on a global platform," said ICE Chairman and
CEO Jeffrey C. Sprecher. "We believe
the combined company will be better positioned to compete and serve
customers across a broad range of asset classes by uniting our
global brands, expertise and infrastructure. With a track record of
growth and returns, clearing and M&A integration, we are well
positioned to transform our combined companies into a premier
global exchange operator that remains a leader in market
evolution."
"The Board of NYSE Euronext carefully considered a range of
strategic alternatives and concluded that ICE is the ideal partner
for NYSE Euronext in an evolving market landscape," said
Jan-Michiel Hessels, Chairman of the
Board of NYSE Euronext. "We look forward to working with ICE
to complete this compelling, value-enhancing combination."
"This transaction leverages the strength of our iconic brand and
the value we have created in our global equity and derivatives
franchises – positioning the business for solid long-term growth
and development," said Duncan L.
Niederauer, CEO of NYSE Euronext. "We are bringing
together two highly complementary businesses, creating an
end-to-end multi-asset portfolio that will be
strongly positioned to serve a global client base and capture
current and future growth opportunities."
Benefits of the transaction include:
Financial
- Acquisition will unlock significant value through the
achievement of merger related cost synergies. ICE has successfully
integrated more than a dozen acquisitions in the last decade, with
a track record of delivering on or exceeding synergy
commitments.
- The transaction is expected to be highly accretive to earnings
in the first year after closing and produce returns on invested
capital above the transaction's cost of investment beginning in
year two.
- Model delivers strong operating leverage while preserving
healthy levels of recurring revenues and participation in a market
recovery, positioned to perform well in a rising interest rate and
improved equity market environment.
- Strong cash flows and balance sheet of the combined company
support continued investments in growth initiatives while
facilitating rapid deleveraging post-close. ICE, upon closing of
the transaction intends to adopt a dividend policy that will
provide for an annual dividend payment of approximately
$300 million. This amount represents
the aggregate amount of NYSE Euronext's current annual dividend
payment.
- Provides for diversification among multiple asset classes and
expands ICE's reach into new markets, including the world's largest
asset class - interest rates - at current cyclical lows.
Operational
- Acquisition creates an unparalleled operator of global
exchanges and clearing houses for agricultural and energy
commodities, credit derivatives, equities and equity derivatives,
foreign exchange and interest rates.
- Benefits from strong global presence, infrastructure and brands
across international markets.
- NYSE Liffe execution and clearing will be merged into ICE Clear
Europe, creating an efficient clearing model poised for growth as
interest rate markets recover and interest rate swap clearing
develops.
- ICE has proven transition capabilities and successfully
launched ICE Clear Europe in November
2008, transferring approximately 26.5 million contracts and
over $16 billion in initial
margin.
Competition and Market Structure
- Builds on track record of improving market transparency and
expands resources to address challenges and opportunities in equity
market structure.
- Enhances innovation and competitiveness within U.S. and
European rate markets.
- Operational and capital efficiency in implementation of new
regulatory requirements with compliant solutions already in
place.
- Emphasis on market safety and security via high-performance,
integrated technology infrastructure.
ICE's lead financial advisor is Morgan Stanley; further
financial advice is being provided by BMO Capital Markets Corp.,
Broadhaven Capital Partners, JPMorgan, Lazard, Societe Generale
Corporate & Investment Banking, and Wells Fargo Securities,
LLC. ICE legal advisors are Sullivan & Cromwell LLP and
Shearman & Sterling LLP. The principal financial
advisers to NYSE Euronext are Perella Weinberg Partners and BNP
Paribas. Legal advisers to NYSE Euronext are Wachtell, Lipton,
Rosen & Katz, Slaughter & May, and Stibbe N.V. Further
financial advice to NYSE Euronext is being provided by Blackstone
Advisory Partners, Citigroup, Goldman Sachs & Co. and Moelis
& Co.
Investor Conference Call
An investor conference call
will be held at 8:45 a.m. ET/1:45 p.m.
GMT today, December 20, 2012,
and is available via the ICE and NYSE Euronext websites. U.S.
participants may dial 1 (866) 700-7441 and international
participants may dial +1 (617) 213-8839. The participant code is
20593477. The call will be available for replay on each investor
website. Media may participate in the call on a listen-only
basis.
ICE-CORP
About IntercontinentalExchange,
Inc.
IntercontinentalExchange, Inc. (NYSE: ICE) is a leading
operator of regulated futures exchanges and over-the-counter
markets for agricultural, credit, currency, emissions, energy and
equity index contracts. ICE Futures Europe hosts trade in half of
the world's crude and refined oil futures. ICE Futures U.S. and ICE
Futures Canada list agricultural, currencies and Russell Index
markets. ICE is also a leading operator of central clearing
services for the futures and over-the-counter markets, with five
regulated clearing houses across North
America and Europe. ICE
serves customers in more than 70 countries. For more information,
please visit: www.theice.com.
The following are trademarks of IntercontinentalExchange, Inc.
and/or its affiliated companies: IntercontinentalExchange;
IntercontinentalExchange & Design; ICE; ICE and block design;
ICE Futures Canada; ICE Futures Europe; ICE Futures U.S.; ICE Clear
Credit; ICE Clear Europe; ICE Clear U.S.; ICE Clear Canada; The
Clearing Corporation; U.S. Dollar Index; ICE Link and Creditex. All
other trademarks are the property of their respective owners. For
more information regarding registered trademarks owned by
IntercontinentalExchange, Inc. and/or its affiliated companies, see
https://www.theice.com/terms.jhtml.
About NYSE Euronext
NYSE Euronext (NYSE: NYX) is a
leading global operator of financial markets and provider of
innovative trading technologies. The company's exchanges in
Europe and the United States trade equities, futures,
options, fixed-income and exchange-traded products. With
approximately 8,000 listed issues (excluding European Structured
Products), NYSE Euronext's equities markets – the New York Stock
Exchange, NYSE Euronext, NYSE MKT, NYSE Alternext and NYSE Arca –
represent one-third of the world's equities trading, the most
liquidity of any global exchange group. NYSE Euronext also operates
NYSE Liffe, one of the leading European derivatives businesses and
the world's second-largest derivatives business by value of
trading. The company offers comprehensive commercial technology,
connectivity and market data products and services through NYSE
Technologies. NYSE Euronext is in the S&P 500 index. For more
information, please visit: http://www.nyx.com.
Forward-Looking Statements
This press release may
contain "forward-looking statements" made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. In some cases, you can identify forward-looking statements
by words such as "may," "hope," "will," "should," "expect," "plan,"
"anticipate," "intend," "believe," "estimate," "predict,"
"potential," "continue," "could," "future" or the negative of those
terms or other words of similar meaning. You should carefully read
forward-looking statements, including statements that contain these
words, because they discuss our future expectations or state other
"forward-looking" information. Forward-looking statements involve a
number of risks and uncertainties. ICE and NYSE Euronext caution
readers that any forward-looking statement is not a guarantee of
future performance and that actual results could differ materially
from those contained in the forward-looking statement. Such
forward-looking statements include, but are not limited to,
statements about the benefits of the proposed merger involving ICE
and NYSE Euronext, including future financial results, ICE's and
NYSE Euronext's plans, objectives, expectations and intentions, the
expected timing of completion of the transaction and other
statements that are not historical facts. Important factors that
could cause actual results to differ materially from those
indicated by such forward-looking statements are set forth in ICE's
and NYSE Euronext's filings with the U.S. Securities and Exchange
Commission (the "SEC"). These risks and uncertainties include,
without limitation, the following: the inability to close the
merger in a timely manner; the inability to complete the merger due
to the failure of NYSE Euronext stockholders to adopt the merger
agreement or the failure of ICE stockholders to approve the
issuance of ICE common stock in connection with the merger; the
failure to satisfy other conditions to completion of the merger,
including receipt of required regulatory and other approvals; the
failure of the proposed transaction to close for any other reason;
the possibility that any of the anticipated benefits of the
proposed transaction will not be realized; the risk that
integration of NYSE Euronext's operations with those of ICE will be
materially delayed or will be more costly or difficult than
expected; the challenges of integrating and retaining key
employees; the effect of the announcement of the transaction on
ICE's, NYSE Euronext's or the combined company's respective
business relationships, operating results and business generally;
the possibility that the anticipated synergies and cost savings of
the merger will not be realized, or will not be realized within the
expected time period; the possibility that the merger may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; diversion of management's attention
from ongoing business operations and opportunities; general
competitive, economic, political and market conditions and
fluctuations; actions taken or conditions imposed by the United States and foreign governments
and regulatory authorities; and adverse outcomes of
pending or threatened litigation or government
investigations. In addition, you should carefully consider
the risks and uncertainties and other factors that may affect
future results of the combined company described in the section
entitled "Risk Factors" in the joint proxy statement/prospectus to
be delivered to ICE's and NYSE Euronext's respective shareholders,
and in ICE's and NYSE Euronext's respective filings with the SEC
that are available on the SEC's web site located at www.sec.gov,
including the sections entitled "Risk Factors" in ICE's Form 10−K
for the fiscal year ended December 31,
2011, as filed with the SEC on February 8, 2012, and ICE's Quarterly Reports on
Form 10-Q for the quarters ended June 30,
2012, as filed with the SEC on August
1, 2012 and September 30,
2012, as filed with the SEC on November 5, 2012, and "Risk Factors" in NYSE
Euronext's Form 10−K for the fiscal year ended December 31, 2011, as filed with the SEC on
February 29, 2012. You should not
place undue reliance on forward-looking statements, which speak
only as of the date of this press release. Except for any
obligations to disclose material information under the Federal
securities laws, ICE undertakes no obligation to publicly update
any forward-looking statements to reflect events or circumstances
after the date of this press release.
Important Information About the Proposed Transaction and
Where to Find It:
In connection with the proposed
transaction, ICE intends to file with the SEC a registration
statement on Form S−4, which will include a joint proxy
statement/prospectus with respect to the proposed acquisition of
NYSE Euronext. The final joint proxy statement/prospectus will be
delivered to the stockholders of ICE and NYSE Euronext. Investors
and security holders of both ICE and NYSE Euronext are urged to
read the joint proxy statement/prospectus regarding the proposed
transaction carefully and in its entirety, including any documents
previously filed with the SEC and incorporated by reference into
the joint proxy statement/prospectus, when it becomes available
because it will contain important information regarding ICE, NYSE
Euronext and the proposed merger. Investors will be able to obtain
a free copy of the joint proxy statement/prospectus, as well as
other filings containing information about ICE and NYSE Euronext,
without charge, at the SEC's website at http://www.sec.gov/.
Investors may also obtain these documents, without charge, from
ICE's website at http://www.theice.com.
Participants in the Merger Solicitation:
ICE, NYSE
Euronext and their respective directors, executive officers and
other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
transactions contemplated by the merger agreement.
You can find information about ICE and ICE's directors and
executive officers in ICE's Annual Report on Form 10-K for the year
ended December 31, 2011, as filed
with the SEC on February 8, 2012, and
ICE's proxy statement for its 2012 annual meeting of stockholders,
as filed with the SEC on March 30,
2012.
You can find information about NYSE Euronext and NYSE Euronext's
directors and executive officers in NYSE Euronext's Annual Report
on Form 10-K for the year ended December 31,
2011, as filed with the SEC on February 29, 2012, and NYSE Euronext's proxy
statement for its 2012 annual meeting of stockholders, filed with
the SEC on March 26, 2012.
Additional information about the interests of potential
participants will be included in the joint proxy
statement/prospectuses, if and when it becomes available, and the
other relevant documents filed by ICE and NYSE Euronext with the
SEC.
This announcement does not constitute an offer or any
solicitation of any offer, to buy or subscribe for any
securities.
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SOURCE IntercontinentalExchange