NYSE Euronext and Deutsche Boerse are terminating their proposed merger, in light of opposition from the European Commission — leaving the proposed Canadian exchange consolidation as the only surviving deal from last year’s rash or proposed exchange mergers.
The companies said Wednesday that they are in discussions to terminate their merger agreement. And, the NYSE Euronext said it would focus on its standalone strategy and plans to return capital to shareholders. It intends to resume a US$550 million share repurchase program following the termination of the merger agreement and after the release of its fourth quarter and 2011 results on February 10.
“Our merger would have created a high standard for transparency, stability and efficiency in the global capital markets, and we proposed significant and tangible remedies designed to address the European Commission’s concerns with the transaction. Butas we made clear throughout this process, we would not agree to any concessions that would compromise or undermine the industrial and economic logic of the proposed combination,” said Jan-Michiel Hessels, NYSE Euronext chairman.
Duncan Niederauer, NYSE Euronext chief executive officer said it now plans to “take advantage of our financial strength to capture opportunities for growth in derivatives, and through our new initiatives including technology services, NYSE Liffe US/NYPC and post-trade services. And, as always, we will continue the success we have had in optimizing the business through continued cost discipline and operational efficiency.”
The failure of this deal leaves Maple Group Acquisition Corp.’s proposed consolidation of the Canadian trading and clearing landscape as the sole remaining large exchange merger awaiting regulatory assent. Several deals involving exchanges in the U.S., Europe and Asia have all fallen through in the face of regulatory opposition, and the proposed merger of the TMX Group and the London Stock Exchange Group plc fell apart amid a lack of shareholder support.
The proposed Maple deals still require approval from securities and competition regulators, and yesterday it extended the deadline for the deal again until Feb. 29. Maple said it is continuing to seek to resolve outstanding issues and concerns raised by the securities regulatory authorities and the Competition Bureau.
Speaking on behalf of Maple, Luc Bertrand said, “We are committed to the transaction and are working diligently to obtain the required regulatory approvals. To this end, we are in ongoing discussions with the regulators and have made numerous submissions to them, including recently submitting a proposed CDS pricing model and proposing remedies to address concerns regarding equities trading.”