The European Union is likely to approve IntercontinentalExchange
Inc.'s (ICE) planned takeover of NYSE Euronext (NYX) without
conditions, according to a person familiar with the
discussions.
The planned $10.1 billion exchange tie-up appeared not to raise
enough competitive concerns to require remedies, with Monday
bringing the deadline for any such concessions to be submitted to
EU antitrust examiners, the person said.
The EU stance on the deal is seen to remove the last major
regulatory hurdle facing the deal, a year after the European
Commission blocked NYSE's proposed merger with German exchange
group Deutsche Boerse AG (DB1.XE, DBOEF). In the U.S., the Federal
Trade Commission and Department of Justice earlier this year
allowed the deal to proceed.
While the NYSE-Deutsche Boerse deal raised concerns in the EU
around one exchange company controlling nearly all trade in futures
and options linked to European interest rates, overlap between ICE
and NYSE is limited to contracts on soft commodities and some U.S.
stock indexes.
The European Commission must decide whether to start an in-depth
review of the deal by June 24. Representatives for ICE and NYSE,
which aim to close their deal later this year, declined comment
Monday.
The lack of remedies sought by the EU on the deal was earlier
reported by Reuters.
Shareholders for ICE and NYSE approved the deal earlier this
month. Shares of ICE settled 3.3% higher at $178.87 Monday, and
shares of NYSE were 2.6% higher at $41.55. Shares of NYSE and ICE
have gained 73% and 39%, respectively, since the transaction was
announced Dec. 20.
EU antitrust officials in recent weeks have queried commodity
traders and rival exchanges about the potential impact of the deal,
which would create the world's second-largest exchange company by
valuation, after Chicago-based CME Group Inc. (CME).
Questionnaires sent by EU examiners focused on ICE and NYSE's
respective markets in commodities like sugar, cocoa and coffee, as
well as derivatives linked to the values of stock-market
benchmarks, according to people familiar with the queries. Seeking
input from market participants on aspects of a merger is a typical
part of the EU deal review process.
ICE and NYSE run the main markets for soft commodities in the
U.S. and U.K., respectively. While similar, the exchanges'
contracts reflecting prices of coffee, cocoa and sugar track
different varieties of the commodities and offer different points
of delivery.
Both exchange companies also list futures linked to stock
indexes, with NYSE's U.S. futures platform listing contracts on
MSCI Inc. benchmarks and ICE's market listing futures on the
Russell Investments family of stock indexes.
Even combined, however, ICE and NYSE's stock-index futures
markets are far smaller than those run by CME Group Inc., which
maintains exclusive rights to trade contracts on the S&P 500
stock index and the Dow Jones Industrial Average. Less than 160,000
equity index contracts changed hands on ICE and NYSE's U.S. markets
on an average day last month, compared to an average 2.8 million
contracts traded on CME's platform each day.
Regional competition authorities in the U.K., Spain and Portugal
agreed to turn over examination of the proposed deal to the
European Union in April.
The deal still requires approval from the group of regulators
that oversee NYSE's European markets. In the U.S., the deal awaits
a ruling by the Securities and Exchange Commission and the
Commodity Futures Trading Commission.
- Michelle Price in London contributed to this article.
Write to Jacob Bunge at jacob.bunge@dowjones.com
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