Deutsche Boerse announced that it has abandoned a possible combination with Euronext NV, leaving NYSE Group Inc. to close its deal with Euronext.

The company said it will also stop all preparatory steps including the regulatory and merger control processes. “This decision was based on the assessment that a transaction supported by both sides will not be achievable and – in the light of recent share price developments – a transaction would no longer create value for Deutsche Boerse shareholders,” it said.

“Politicians, stakeholders and regulators across Europe have confirmed their preference for a European solution. Despite this broad support, the Euronext management did not reopen talks with Deutsche Boerse,” the exchange added. “However, Deutsche Boerse continues to believe that a combination of exchanges can only be successful if both sides willingly work together.”

Deutsche Boerse said that it is, “well positioned with its diversified portfolio of businesses and a successful business model and is working towards another record result in 2007 following outstanding performance in 2005 and 2006. The company will pursue organic growth opportunities in all business divisions and will remain open to all forms of co-operations that will create value for shareholders and customers.”

“We are convinced that, in our industry, mergers can only be successful with the support of both management teams and the industry. We have invested time and commitment but it is part of our responsibility to recognize when further effort doesn’t make sense,” said Deutsche Boerse CEO Reto Francioni. “External growth is an option but not a necessity for Deutsche Boerse. Based on our very strong position in the industry, we will continue our successful organic growth path. Nevertheless, we expect to take an active role in the consolidation process in our industry in Europe and beyond.”

At the same time, it was announced that seven of the leading investment banks in Europe plan to form a new company to create a pan-European equities trading platform. The seven partners are Citigroup; Credit Suisse; Deutsche Bank; Goldman Sachs; Merrill Lynch; Morgan Stanley and UBS.

The consortium said that the new trading platform is recruiting its own management team, independent from the founding investment banks who will be the shareholders. It aims to attract liquidity from other market participants – who will use the system on an equal footing with the founders. All participants will be able to fulfill orders for their clients on a platform that aims to reduce the costs of buying and selling shares and promote greater transparency of equity prices and volumes.

Speaking on behalf of the consortium of the seven banks, a spokesman said, “Today, equity trading is concentrated on a number of domestic stock exchanges. We are responding to the MiFID legislation by creating an integrated pan-European trading platform where equities can be traded more cost effectively, obtaining significant liquidity with greater efficiency for each and every participant in the equity markets.”

The consortium has already committed people, cash and resources to develop the project and has already begun meetings with European regulators and authorities. The new trading platform will be launched next year, and the consortium will also be contacting other financial institutions over the coming weeks to keep them updated on its progress and encourage them to use the new MTF when it is launched.