IntercontinentalExchange to buy NYSE Euronext for US$8.2 billion

Under the terms of the agreement, which was unanimously approved by the boards of both companies, the transaction is currently valued at US$33.12 per NYSE Euronext share, or a total of approximately US$8.2 billion, based on the closing price of ICE’s stock on December 19. NYSE Euronext shareholders will have the option to elect to receive a mix of cash and stock, subject to a maximum cash consideration of approximately US$2.7 billion and a maximum aggregate number of ICE common shares of approximately 42.5 million. The overall mix of the US$8.2 billion of merger consideration being paid by ICE is approximately 67% shares and 33% cash.

The transaction is expected to close in the second half 2013, subject to regulatory approvals in Europe and the U.S. and approval by shareholders of both companies.

The companies expect to produce expense synergies of US$450 million in the second full year post-closing, while earnings accretion of more than 15% is expected in the first year after closing. ICE clearing will be more capital efficient and provide operational efficiencies for clearing members, it says.

ICE also says that it is committed to preserving the NYSE Euronext brand, and the company will maintain dual headquarters in Atlanta and New York. It also intends to maintain the position of NYSE Liffe in London as a leading international market operator for derivatives products, including its benchmark interest rate complex. However, it plans to explore spinning off Euronext in an initial public offering.

ICE’s CEO, Jeffrey Sprecher will continue as chairman and CEO of the combined company and Scott Hill as CFO. The NYSE’s Duncan Niederauer will be president of the combined company and CEO of NYSE Group. Four members of the NYSE Euronext board will be added to the ICE board, which will be expanded to 15 members.

“Our transaction is responsive to the evolution of market infrastructure today and offers a range of growth opportunities, while enhancing competition in US and European markets and broadening our ability to address new markets and offer innovative products and services on a global platform,” said Sprecher.

“We believe the combined company will be better positioned to compete and serve customers across a broad range of asset classes by uniting our global brands, expertise and infrastructure. With a track record of growth and returns, clearing and M&A integration, we are well positioned to transform our combined companies into a premier global exchange operator that remains a leader in market evolution,” he added.

“The board of NYSE Euronext carefully considered a range of strategic alternatives and concluded that ICE is the ideal partner for NYSE Euronext in an evolving market landscape,” said Jan-Michiel Hessels, chairman of the NYSE board. “We look forward to working with ICE to complete this compelling, value-enhancing combination.”

“This transaction leverages the strength of our iconic brand and the value we have created in our global equity and derivatives franchises — positioning the business for solid long-term growth and development,” said Niederauer. “We are bringing together two highly complementary businesses, creating an end-to-end multi-asset portfolio that will be strongly positioned to serve a global client base and capture current and future growth opportunities.”

ICE’s lead financial advisor is Morgan Stanley; further financial advice is being provided by BMO Capital Markets Corp., Broadhaven Capital Partners, JPMorgan, Lazard, Societe Generale Corporate & Investment Banking, and Wells Fargo Securities, LLC. The principal financial advisers to NYSE Euronext are Perella Weinberg Partners and BNP Paribas.