By Margot Patrick, Ulrike Dauer and Vladimir Guevarra
Four European stock exchanges currently owned by NYSE Euronext
(NYX) could attract interest from European and Asian rivals,
analysts said Thursday, as a fresh round of consolidation hit the
global exchanges industry in the form of an agreed purchase of NYSE
Euronext by rival IntercontinentalExchange (ICE).
As part of the $8.2 billion acquisition, ICE said it will look
to float Euronext's stock-exchange businesses in France, the
Netherlands, Belgium and Portugal, leaving it with the New York
Stock Exchange and NYSE's Liffe derivatives market.
Analysts said Deutsche Boerse AG (DB1.XE), London Stock Exchange
Group PLC (LSE.LN) and Nasdaq OMX Group Inc. (NDAQ) could be among
the parties that might be interested in buying the four European
stock-exchange businesses if ICE instead decides to sell them or
the IPO plan is otherwise derailed. Additional interest could come
from the exchange operators of Hong Kong and Singapore, analysts
said.
An ICE spokeswoman declined to comment. Spokespeople for
Deutsche Boerse, London Stock Exchange and Nasdaq OMX declined to
comment. The Hong Kong and Singapore exchanges couldn't immediately
be reached for comment.
Dirk Becker, an analyst at Kepler Capital Markets, said Deutsche
Boerse might look at Euronext's four European stock exchanges if
they were to be put up for sale, to potentially link them with its
own Xetra cash market and Clearstream clearing and settlement
businesses. He estimated the exchanges might be worth
"substantially below EUR1 billion."
The possible ICE-NYSE Euronext deal adds to a shake-out of the
global stock exchange industry, as exchange operators and service
providers grapple with regulatory changes and shifts in the
investment landscape, including a sharp slowdown in cash equities
trading.
Consolidation has been a bumpy path, though, with several huge
cross-border deals falling apart just in the past two years due to
strong opposition from nationalist politicians or anti-trust
concerns from regulators. These include proposed tie-ups between
Australia and Singapore, the LSE and TMX Group Ltd. (X.T) of
Canada, and Deutsche Boerse and NYSE Euronext.
Nasdaq OMX in 2011 was foiled in an effort to buy NYSE Euronext
as part of a joint bid with ICE that would have given ICE the Liffe
business, because of the dominant position Nasdaq would have had in
U.S. stock trading.
However, there have been successful deals, such as Hong Kong
Exchanges & Clearing's (0388.HK) purchase of the London Metal
Exchange, and the merger of Russia's two big exchanges - RTS and
MICEX.
Analysts Thursday said a possible change in ownership at NYSE
Euronext's four European exchanges probably wouldn't raise any
regulatory issues. If the float plan proceeds, Euronext will be
returning to its form as a standalone, publicly traded company
before being bought by NYSE in 2007.
However, this time around it would be detached from Liffe, the
London-based derivatives market it purchased in 2002 and a main
area of growth for Euronext.
While Liffe is thriving amid a global move to move more
derivatives trading onto exchanging to meet global regulations,
cash equities trading volume and revenue is in decline at exchanges
across the world.
-Write to Margot Patrick at margot.patrick@dowjones.com
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