LONDON (Reuters) - Germany's Deutsche Boerse and transatlantic NYSE Euronext have announced a merger to create the world's largest bourse, pushing aside potential political and regulatory obstacles.
The German exchange operator will own 60 percent of the combined group, which will have 2010 net revenues of $5.4 billion, have dual headquarters in New York and Frankfurt and be incorporated in the Netherlands, the companies said.
KONRAD BECKER, ANALYST AT MERCK FINCK
"Many questions still need answering, above all how much the merger will cost if jobs are cut. Problems could also arise through the fact that there a two headquarters in New York and Eschborn. This could lay the foundation for conflicts or rivalry between both companies."
MARKUS MUELLER, SENIOR TRADER AT ETX CAPITAL
"I think that the saving which will be possible through the merger look very promising and the division of the ownership is sensible too, as it reflects the current scale of both parties. The time scale also encouraging and I would say very realistic. For investors, the full implication of the deal is yet to be revealed ... It will also be interesting to see whether CME will make a rival offer and whether such an offer would be successful."
MARTIN PETER, ANALYST AT LBBW
"My skeptical view has not changed. Realizing the planned cost synergies will not be easy as coordination between Paris, New York and Frankfurt can be difficult. I doubt that this will prove a success for shareholders over the next quarters."
VLAD KHANDROS, ANALYST AT BROKERAGE LIQUIDNET
"There is little evidence these cross-border deals will provide material benefits to institutional investors beyond some potential reduction in fragmentation."
CHRISTIAN MUSCHICK, SILVIA QUANDT RESEARCH
"If you look at management, Duncan Niederauer makes sense as the CEO. Politics aside, a change of management at Deutsche Boerse seems necessary. Andreas Preuss as deputy also makes sense. After all, the derivatives business is the most important segment after the merger. Even from a political point of view, this constellation is good. NYSE is more innovative and more up to snuff. Deutsche Boerse was already very defensive and focused especially on cost control. The valuation appears to be fair when you compare market capitalization."
MICHAEL HOLLAND, CHAIRMAN OF HOLLAND & CO:
The people who are wringing their hands about the passing of an American icon are correct on the one hand. On the other hand, Deutsche Boerse was simply larger and the dominant partner. I think they were aware of that PR significance. ... Niederauer is respected and I think to have him as the CEO was a good move.
FRANK DAVIS, DIRECTOR OF SALES AND TRADING AT LEK SECURITIES IN NEW YORK
"There's a lot of uncertainty. People are worried there could be an extended fight. There may be some nationalistic posturing, especially on the U.S. side now that we know that the majority of board members will be German. There will be some roadblocks before this all comes together.
"From a business perspective, the deal could still happen, but it may not go through in the format that it was initially set up as. The companies may not have had the time to vet this out since they needed to rush it out after the London Stock Exchange deal with Toronto.
PAUL EDMONDSON, PARTNER AT UK LAW FIRM CMS CAMERON MCKENNA
"The exchanges are reacting to regulatory as well as market developments. Both the Mifid legislation now being reviewed in Europe and the international reform of OTC derivatives in the wake of the financial crisis lie behind this move."
DUNCAN HIGGINS, HEAD OF EUROPEAN ELECTRONIC TRADING AT BROKER ITG
"We understand the drivers for consolidation. It's something that everyone has been predicting since Mifid in 2007. First, we had fragmentation and now we're moving to consolidation, which will offer greater efficiencies that should be passed on as lower costs for investors."
WERNER VOGT, DIRECTOR AT SIX GROUP
"The future of Eurex will have to be discussed by Deutsche Boerse and SIX Group if the Deutsche Boerse/NYSE Euronext deal is successful. It is still very early days and no decision has been made but we are open to talks regarding Eurex, Scoach and Stoxx if the NYSE Euronext deal moves ahead."
HERBIE SKEET, ANALYST AT EXCHANGE CONSULTANCY MONDO VISIONE
"This merger -- if approved -- creates a true thousand pound gorrilla. The new entity will be a global powerhouse, which will dominate derivatives trading in Europe and be a major force in U.S. and European cash equities trading."
JUERGEN MEYER, FUND MANAGER AT SEB ASSET MANAGEMENT, FRANKFURT:
"The deal makes sense for several reasons. Developing new trading systems is the biggest cost factor for trading houses around the world and it doesn't make sense to invent the wheel twice."
(Compiled by Kirstin Ridley; reporting by Luke Jeffs in London, Maria Aspan and Christopher Sanders in New York, Christoph Steitz, Daniela Pegna and Josie Cox in Frankfurt)
