Source:
WSJThe tie-up between NYSE Euronext and Deutsche Börse has the potential to create a global equities monster with a formidable pan-European franchise, and would dwarf the group created by Wednesday's other surprise merger of the London Stock Exchange and the Toronto Stock Exchange, analysts said.
Will Rhode, an analyst at Tabb Group, said the merger will create a massive, truly pan-European exchange. "The deal with NYSE Euronext makes sense because the exchanges are aligned in terms of regions, products, and their regulatory outlook on the future of the European market infrastructure. The exchange will be truly pan-European, provided it does not violate European competition rules."
The deal will see the existing trans-Atlantic giant NYSE Euronext expand its European presence hugely, scooping up a major chunk of European equities trading and derivatives business. Mr. Rhode said the deal is especially crucial for Deutsche Börse, which would have been left isolated following the day's surprise merger of the London Stock Exchange with the Toronto Stock Exchange. "After this morning's events, Deutsche Börse was the only exchange left without a global strategy," he said.
By the end of 2010, Deutsche Börse had 12.77% of trading in European equities, according to data from Thomson Reuters. NYSE Euronext, meanwhile, which operates equities markets in Paris, Amsterdam, Brussels and Lisbon, had 16.45% market share in European equities for 2010. Both institutions have seen their market share in equities eroded during the past three years by alternative trading platforms. NYSE Euronext, in particular, is coming under attack from a number of alternative players, including Equiduct and Turquoise.
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http://online.wsj.com/article/SB10001424052748704132204576135792189398316.html
Larry Kudlow was freaking out about this last night.
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