The New York Stock Exchange (NYSE Euronext) and Deutsche Borse have said that a planned merger between them would target €300 million (£255 million) in IT and operational cost savings.
The two exchanges last night confirmed heightened speculation that they were in advanced talks to merge, in a move that would create the world’s second largest trading venue by market capitalisation, after the Hong Kong Exchange.
The merger announcement follows hot on the heels of a statement yesterday from the London Stock Exchange that it is in advanced talks to merge with Toronto parent TMF. That merger is expected to see common IT platforms introduced in a Linux and Unix-based environment, as well as £35 million technology operational savings.
In a combination between NYSE Euronext and Deutsche Borse, there would be “global scale, product innovation, operational and capital efficiencies, and an enhanced range of technology and market information solutions”, the two parties said in a statement.
The exchanges’ clients would be able to do business more easily and more widely because of “common IT infrastructure” and simplified clearing processes, they added. But details, of which infrastructure will be chosen, remain sketchy.
Today, NYSE Euronext said it had also established datacentre co-location services in London, working with host company Interxion. It promised "low latency" trading and data services for customers in the city.
NYSE Euronext chief executive Duncan Niederauer would become CEO of the combined group, with Deutsche Borse chief executive Reto Francioni as president. Deutsche Borse shareholders would hold the majority of the equity, at around 60 percent, although the companies insisted a new management board would be drawn “equally” from both firms.
The move may also be seen as an affirmation by the two large exchanges that they want to distance themselves from alternative trading venues, many of which are newer and built around the latest systems, but have less regulatory oversight.