NYSE Euronext ICE Deal Ends Era

The iconic New York Stock Exchange is being acquired by 12-year-old start-up IntercontintentalExchange in an $8.2 billion dollar deal that could increase the dominance of electronic trading.

Published

6 months ago

Categories

Finance

Topics

United States

Places

United States of America, Georgia, New York City, New York, Atlanta

Companies

Nyse Euronext, Morningstar, Inc., IntercontinentalExchange, Inc.

Transcript

Outside the NYSE Euronext holiday bells ring just like every year- but Thursday's $8 billion dollar takeover deal from the IntercontinentalExchange marks the end of an era. And an admission the NYSE had to make a move: Morningstar's Gaston Ceron: SOUNDBITE: GASTON CERON, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "We are in a kind of beaten down environment with volume in equities overall and I think the exchange just has to find better ways to compete." Before this deal, shares of NYSE Euronext had fallen by nearly a third- since a previous offer from ICE and Nasdaq failed. Shares jumped on word of the current deal. The NYSE has had a rough ride - it's been hit by new technology and the rise of private trading venues run by Wall Street banks and brokers. ICE says it expects to get $450 million in cost savings- and boost earnings by 15 percent. Not clear?- if that will trickle down and save investors money on trading. ICE will also look to sell Euronext- in an initial public offering after the deal closes. But it will hold onto Liffe, Europe's second largest derivatives market- to better compete against the U.S. based CME group- its largest U.S. based rival. While the takeover of the two-centuries old NYSE by a 12-year old start-up in Atlanta is dramatic- the reality is most of those changes were already happening: SOUNDBITE: GASTON CERON, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "I don't think necessarily this is a final nail in the box or anything like that just because it's been a continuing evolution. It's certainly possible that we will see more electronic trading but you know I think that is a topic that gets a lot of attention but at the same time you know that's been a long running trend and I'm sure things will continue to pull in that direction." And don't expect the NYSE name to go anywhere- ICE says it expects to hold onto that iconic brand.