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The NYSE – Deutsche Borse Deal again | Advantage Dealbook

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After more than ten years since its last important failed attempt, the NYSE Deuitsche Borse went to the extent of sharing the CEO to work out its strategy for a merger, winning quick government approvals across the pond in a surprise after the deal was announced in 2010. However the anti trust investigation in Germany is still weeks away from closing and the Exchange representative in the German Government , the Hessian Minister of Finance has already presented a list of concessions to the business model of the two exchanges. The exchanges aver that these concessions have been made in real time.

The two exchanges had earlier been asked by the EU anti trust agency to explain their single brand NYSE Liffe derivative businesses which they were ready to divest outside the core markets in Amsterdam, Paris Brusesels and London. Now the group has come back ready to divest these four derivatives businesses of NYSE Liffe too to save the merger deal, providing access to the new owners to the German clearing house for settlemente proving “business as usual”

This concession allows a significant derivatives market in single stock options and futures outside the NYSE – Euronext umbrella The


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combined Eurex Liffe entity would still control 95% of the trading in German government bond futures and short term trading instruments. The combination is being pitched as a European champion int he new post crisis world for anti trust regulators to action the necessary approvals seeming harder to close now than ever before. The AT&T -T mobile deal was lost earlier last week as AT&T gave up on the FCC and the US Department of Justice agreeing to the deal

The German government in the mean time holds the operating license of the German exchange and has issues with management decisions for the exchange being made outside Germany after the deal. The competition commisioner Joaquin Almunia passes his decision ont he deal in the next 24 hours after having fairly warned the dealmakers one week ago for more concessions. cost rationalisation for the combined operations would also deteriorate after the new exit from derivatives business at the four core centers Deutsche Borse was always being questioned on controlling everything in a single silo from trading to clearing for its exchange services on Eurex and its access now by others may still be too little too late for regulators despite Duncan Neiderhauer’s best efforts to salvage the now 15 year old dream earlier lost on anti trust and control grounds on more than two occassions as also for the German exchange’s lack of capabilities before it built Eurex.



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One comment on “The NYSE – Deutsche Borse Deal again | Advantage Dealbook

  1. Pingback: These are the Dealmakers of 2011 | Advantage Dealbook | The Banking and Strategy Initiative

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