Berkshire Hathaway Inc. (BRKA, BRKB) and CME Group Inc. (CME)
eyed deals for different pieces of NYSE Euronext (NYX) ahead of the
Big Board parent's agreement to be acquired by
IntercontinentalExchange Inc. (ICE), people with knowledge of the
discussions said.
In late November, Berkshire outlined a proposal to acquire NYSE
Euronext that would have first required the sale of the exchange
group's prized European derivatives business, while CME months
earlier approached its exchange rival about pieces of that same
division, the people said.
The focus on NYSE's London-based Liffe futures unit, disclosed
partially Monday in a regulatory filing, underscores its importance
in the agreed $8.2 billion takeover by ICE, disclosed Dec. 20. ICE
aims to fuse the division with its own U.K. energy markets while
adding NYSE's U.S. stocks and options franchise to the
commodities-market portfolio of the Atlanta-based exchange
group.
A spokeswoman for CME declined comment Monday. Berkshire
Chairman Warren Buffett declined to comment.
The deal options weighed by NYSE were disclosed in a filing that
also outlined the regulatory hurdles faced by the ICE plan,
challenges that have torpedoed several major exchange tie-ups in
recent years.
As discussions with ICE proceeded last autumn, NYSE Euronext
advisers Perella Weinberg Partners LP on Nov. 25 reached out to "a
large industrial and financial-holding company" to explore interest
in a possible acquisition of NYSE's business, the filing said. A
person familiar with the matter confirmed that this company was
Berkshire Hathaway. CNBC earlier reported Berkshire Hathaway's
involvement.
On Nov. 28, NYSE Euronext received the proposal conditioned on
the sale of NYSE's European derivatives business at a minimum sale
price specified by the bidder, according to the filing. NYSE said
in the filing that the proposal carried a lower value than a deal
outlined by ICE, and that the company couldn't commit to a time
frame for completing due diligence on such a deal.
NYSE separately disclosed in the filing that it had been
approached by "a large U.S.-based derivatives exchange" about a
"potential but non-specific interest in components of NYSE
Euronext's derivatives business." That exchange was Chicago-based
CME, according to people close to the discussions.
At an October 25 board meeting, NYSE directors authorized
executives to continue weighing a possible sale of the European
derivatives division, as well as exploring a deal with ICE and
remaining independent, according to the filing.
CME already controls the vast majority of trading on listed U.S.
futures markets, such as Treasury yields, stock indexes and grains,
and is developing its own London-based U.K. exchange to expand in
Europe. Securing NYSE's London-based derivatives business, with a
focus on European interest rates, would have earned CME the
region's second-largest futures platform measured by trading
activity, after Germany's Deutsche Boerse AG (DB1.XE, DBOEF).
On Dec. 13, NYSE's board of directors determined to move ahead
with the ICE proposal, according to the filing.
ICE and NYSE plan to submit their deal for formal review by the
European Commission by July 2013, according to the filing. Putting
the deal up for review by the regional body would streamline a
process that otherwise would require the individual sign-off of
antitrust regulators in the U.K., Spain and Portugal, though those
agencies would have to allow the European Commission to take up the
review.
In the U.S., approval must be secured from the Federal Trade
Commission and the Department of Justice, according to the
filing.
About a dozen financial-regulatory authorities in the U.S. and
Europe will also need to green-light the deal, according to the
filing. Regulators in other jurisdictions, including Japan, Brazil,
Hong Kong and Singapore, will be formally notified with respect to
the exchanges' business in those places, according to the
filing.
--Jason Zweig contributed to this article.
Write to Jacob Bunge at jacob.bunge@dowjones.com and Anupreeta
Das at anupreeta.das@wsj.com.
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