SEC Nod in Favor of ICE-NYSE Deal - Analyst Blog
20 Agosto 2013 - 11:05PM
Zacks
Reuters reported that last week the acquisition of the financial
services corporation, NYSE Euronext Inc. (NYX) by
electronic trading platform Intercontinental Exchange
Inc. (ICE) has been approved by the Securities and
Exchange Commission (SEC). The acquisition was announced in Dec
2012 and was pending regulatory approval.
Based on the closing price of $185.80 of ICE on Aug 1, 2013, the
company is acquiring NYSE for a purchase consideration of $10.6
billion, higher than the $8.2 billion takeover price decided
earlier. Through the deal Intercontinental Exchange aims to reach
out to newer markets and diversify among multiple asset
classes.
This takeover will unite two leading exchange groups to ultimately
form a diversified global exchange operator. This amalgamation
would mark the evolution of the third largest global exchange group
after Hong Kong Exchanges and Clearing, and CME Group
Inc. (CME). However, the deal requires approval from
European national regulators before it is finalized. The combined
entity is expected to be better positioned to compete and serve
customers on a large scale.
Upon culmination of the takeover, Euronext, the European electronic
stock exchange of NYSE that operates the Paris, Amsterdam, Brussels
and Lisbon stock exchanges is expected to be divested. Also, as
previously decided, Europe’s second largest derivatives market –
NYSE Liffe will be merged into Intercontinental Exchange Clear
Europe. This deal is expecting culmination in Sep 2013 and is
pending regulatory approval from national regulators in Europe.
The deal is expected to be accretive to Intercontinental Exchange’s
2013 earnings and generate higher returns on invested capital 2014
onward. Alongside, the company is expected to tap the promising
growth opportunities in the U.S. and European markets. NYSE being a
big name in the market, will give Intercontinental Exchange an
opportunity to take a share of the pie that the market has to
offer. Through the acquisition, Intercontinental Exchange will also
be able to foray into newer markets and come up with better
products and services on a global platform by utilizing NYSE’s
expertise and services.
Intercontinental Exchange currently carries a Zacks Rank #3 (Hold).
Among other electronic trading platforms, MarketAxess
Holdings Inc. (MKTX) carries a favorable Zacks Rank #1
(Strong Buy).
CME GROUP INC (CME): Free Stock Analysis Report
INTERCONTINENTL (ICE): Free Stock Analysis Report
MARKETAXESS HLD (MKTX): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis Report
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