Profit from the merger of NYSE Euronext with Deutsche Boerse will amount to 500 million euro. This information was provided by Duncan Niederauer, the Executive Director of NYSE, in the interview to The Financial Times. The purpose of this announcement is persuasion of the shareholders in profitability of merger with the German exchange.
Niederauer noted that revaluation of the deal with Deutsche Boerse had increased the expectations of cost reduction by 100 million euro. Initially estimated profit amounted to 400 million euro. He also mentioned that the biggest clients of two exchanges would be able to save up to 3 billion dollars due to the combination of the European derivatives platforms.
In March 2011 another American exchange – Nasdaq OMX offered NYSE to merge. In the beginning of April Nasdaq OMX with IntercontinentalExchange (ICE) overbidded Deutsche Boerse’s offer with 11.3 billion against 9.5. As estimated by Nasdaq OMX the revenue will equal 740 million euro.
The NYSE’s Chief Executive has noted that Nasdaq OMX expectations could be overrated because their assessment does not include the probable client loss. At the same time the benefits from a deal with Deutsche Boerse can be undervalued. Niederauer reminded that the main goal of Nyse merger with the German exchange is cost saving.
First negotiations between NYSE and Deutsche Boerse were held in 2008 after the takeover of New-York exchange – Euronext, but they finished with zero results. On February 15, 2011 two companies has officially declared the merger which will result in establishment of the biggest exchange in the world by the sales volume and net profit.
