The FINANCIAL — NYSE Euronext (NYSE: NYX) announced on April 10 that its Board of Directors, consistent with its fiduciary duties and advised by its independent financial and legal advisors, has unanimously reaffirmed the previously announced combination agreement with Deutsche Boerse AG (XETRA:DB1) and rejected the unsolicited and highly conditional proposal by NASDAQ OMX Group, Inc. (Nasdaq: NDAQ) and IntercontinentalExchange, Inc. (NYSE: ICE) to break up NYSE Euronext.
The NYSE Euronext/Deutsche Boerse combination is consistent with the long-term strategy adopted by the NYSE Euronext Board of Directors in 2009, a strategy that the company has regularly reaffirmed and been successfully executing. The combination with Deutsche Boerse will position the combined company to be the leading global exchange operator and create substantially more long-term value for shareholders, and is significantly more likely to close.
Speaking on behalf of the Board, NYSE Euronext Chairman Jan-Michiel Hessels said:
“Breaking up NYSE Euronext, burdening the pieces with high levels of debt, and destroying its invaluable human capital, would be a strategic mistake in terms of where the global markets are going, and is clearly not in the best interests of our shareholders. The highly conditional break-up proposal from Nasdaq/ICE would also require shareholders to shoulder unacceptable execution risk.
“We are confident that the combination with Deutsche Boerse will create compelling value for our shareholders. With Deutsche Boerse, we are committed to creating the world’s premier exchange group – a geographically diverse business, with strengths in multiple asset classes across the spectrum of capital markets services. The new company will fundamentally change the global exchange industry, establishing a world leader in both derivatives and risk management and the premier global venue for capital-raising.“
As previously announced, the combination of NYSE Euronext and Deutsche Boerse will create:
the world leader in derivatives and risk management, with more than 18 million contracts traded per day, and the only clearing house offering real-time position monitoring;
the world’s leading cash exchange, including the world’s largest, most iconic capital-raising venue with a combined market capitalization of domestic listed issuers larger than the next four exchange groups combined;
the leading exchange provider of technology services and information content, a high-growth technologies and market data services business and the globally renowned STOXX index franchise; and
the global pioneer in international post-trade infrastructure and settlement with a broad international revenue base, and significant partnerships in Asia and Latin America .
Mr. Hessels continued: “The combination will be financially powerful, with a strong balance sheet, a world-class management team and an executable strategy — one perfectly positioned for strategic expansion at a critical juncture in the industry’s global development. The scale and strength of the business will deliver substantial operational and capital savings for clients, along with product innovation and an enhanced range of technology services and market data solutions that will help clients succeed in the rapidly changing global marketplace.”
NYSE Euronext’s financial advisers are Perella Weinberg Partners, BNP Paribas, Goldman, Sachs and Co., and Morgan Stanley & Co., Inc. Its legal advisers are Wachtell, Lipton, Rosen & Katz, Stibbe N.V. and Milbank, Tweed , Hadley & McCloy LLP.