D.Boerse, NYSE narrow in on name as talks intensify

FRANKFURT Sat Feb 12, 2011 5:04pm EST

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FRANKFURT (Reuters) - Deutsche Boerse and NYSE Euronext may call a merged company "DB NYSE Group," according to two people close to the negotiations, though the companies said no name for what could become the world's largest exchange operator has been picked.

The Frankfurt- and the New York-based companies will likely sidestep thorny issues of technology in a bid to strike a merger deal by early next week, the Europe-based sources said. The companies are edging toward an outline deal to be agreed on Tuesday or Wednesday, one source said.

The exchange operators said on Saturday their negotiations continued. "No name has been finalized and we expect any decision on a name would be made at a later date, subject to the successful completion of a merger agreement," they said in a joint statement.

Earlier this week, the companies unveiled the first details of the merger plan that would give Deutsche Boerse shareholders about a 60 percent stake, and name NYSE Euronext's head Duncan Niederauer as chief executive.

The two Europe-based sources said the sides have still not finalized a merger document that can be presented to Deutsche Boerse's board of directors, confirming earlier reports.

They said the name DB NYSE Group has emerged as the front runner among the options for the new company.

Negotiations over a name, and where to locate various operations across the two continents, highlight some of the difficulties in bringing together companies that are both operationally complicated and symbols of national pride.

Decisions over leadership, including the composition of a combined company's board, have been made, sources said earlier this week.

In their talks, the two sides are hammering out a framework deal which focuses on functions and personalities but key issues, such as over information technology (IT), are likely to be postponed.

"How you make the details work later on is a different matter," one of these people said.

Rather than deciding now which technology platform to use for derivatives trading on a group level, the parties are seeking to agree on "a person for IT coordination."

This person will later decide whether to use Deutsche Boerse's Eurex or Euronext's Liffe technology, or whether to develop a new platform using staff from both camps.

It is also not yet decided whether the combined group will take the legal form of SE or an NV (the corporate designation) for the Amsterdam-based legal entity, the person said.

Despite the uncertainty, there is quiet optimism the two sides will be able to make an announcement early next week.

Unlike when talks between the two companies were disrupted by a leak in December 2008, negotiations have now reached "a much more mature level," and are more likely to bear fruit, a person close to the deal said.

The two powerhouse exchange operators said on Wednesday they were in advanced talks to merge, just hours after London Stock Exchange unveiled a bid for Canadian market operator TMX Group Inc.

(Reporting by Edward Taylor and Philipp Halstrick; Additional reporting by Anika Ross in Frankfurt and Jonathan Spicer and Paritosh Bansal in New York; editing by Patrick Graham and Philip Barbara)

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Comments (3)
Ralphooo wrote:
Does “NYSE Euronext” refer to the entire New York Stock Exchange, or only part of it, or something else entirely?

Feb 12, 2011 7:30pm EST  --  Report as abuse
SanPa wrote:
350 years of American history … sold to the highest bidder. This was not part of Reagan’s dream.

Feb 12, 2011 7:40pm EST  --  Report as abuse
The United States and Germany are rational partners performing a reasonable merger. The US financial system is a capitalist one where capital seeks its most profitable investment. We are, figuratively speaking, neither in Kansas anymore nor 1981. The world has grown increasingly interdependent and competitive with the US in many ways LOSING prior advantages to more nimble and cheaper competitors. Reinvention is a now a fact-of-life. Forming a synergistic relationship with our German partners in the Deutsche Boerse makes sense with issues of scale leading to higher efficiencies and competitiveness.

Feb 13, 2011 4:03pm EST  --  Report as abuse
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